It may have taken them awhile, but it was recently announced that PepsiCo, one of the world’s largest food and beverage companies, that it plans to invest US$1-billion in Russia over three years, with its partner The Pepsi Bottling Group (PBG).
The investment will bring the cumulative investment in Russia by PepsiCo and PBG to over $4-billion and is part of PepsiCo’s ongoing strategy to expand in emerging markets.
While in Russia to open a new bottling plant outside of Moscow, PepsiCo chairman and CEO Indra Nooyi made the announcement. Nooyi joined a meeting of business leaders convened by Russia’s president Medvedev and US president Obama and to mark 50 years since Pepsi-Cola was introduced in Moscow at the 1959 American National Exhibition.
The investment in Russia is funding various programs to expand manufacturing and distribution capacity. In addition to the new beverage facility opening this week in Domodedovo, a new snacks manufacturing plant is expected to open later this year in the southern city of Azov.
PepsiCo and PBG also are planning significant investments to build a state-of-the-art warehousing and distribution infrastructure for the Lebedyansky juice business. And PepsiCo, the largest private user of potatoes grown in Russia, plans to continue its substantial investment in local agriculture, applying the latest technology to ensure the highest productivity and quality standards.
When operating at full capacity, the Domodedovo plant will be larger than any bottling plant currently in PepsiCo’s global system. It will produce a range of beverage brands, including Pepsi-Cola, Aqua Mineral water and ready-to-drink Lipton Iced Teas (through PepsiCo’s joint venture with Unilever) for sale by retailers across Russia as well as neighboring CIS countries.
The plant incorporates a number of water-saving and energy-saving features designed to reduce its environmental impact. It employs a state-of-the-art water filtration system that uses ozone molecules for purification. It is also the first PBG plant in Russia equipped to produce ultra-light PET plastic bottles on all bottling lines, with labeling technology that uses no glue, less plastic and less energy than traditional labels. In addition, the plant is designed to utilize energy-efficient lighting systems.
Additional information about PepsiCo in Russia is available at www.pepsico.com/russia.