PepsiCo Inc., one of the world's largest food and beverage companies, and Pepsi-Cola Products Philippines Inc. (PCPPI), PepsiCo's exclusive beverage bottling partner in the Philippines, today announced an agreement for PCPPI to also manufacture one of PepsiCo' s world-famous snacks brands locally in the Philippines.
Under the terms of the agreement, PCPPI will make and distribute a range of PepsiCo's popular snack products and flavors to the Philippines' 100 million consumers. PCPPI is expected to commence manufacturing later this year.
"This development presents an exciting opportunity for PCPPI to further its vision of becoming a premier food and beverage company in the Philippines,” said Furqan Ahmed Syed, President of PCPPI. “Leveraging on PepsiCo's established line of snacks is an exciting and strategic step in our first foray into the foods business."
The agreement between PepsiCo and PCPPI marks the creation of only the second PepsiCo snacks franchise operation in the world, with the first commencing manufacturing in Bangladesh earlier this year. The creation of the joint snacks-and-beverage franchise operations in the Philippines reflects PepsiCo's ongoing drive to ensure the integration of its food and beverage portfolio across multiple platforms, including manufacturing and go-to-market execution.
“Pepsico’s iconic brands like Cheetos will be another welcome addition to PCPPI’s portfolio of high quality food and beverage offerings - satisfying the need of Filipino consumers for great tasting snacks while complimenting our current roster of thirst-quenching beverages ”, adds Jika Dalupan, Vice President for Corporate Affairs & Communication.
The agreement also marks another milestone in PepsiCo's longstanding business relationship with the LOTTE group, a multinational food and retail conglomerate based in South Korea that is PCPPI’s largest shareholder. PepsiCo has worked closely with LOTTE in Korea since 1976 and in the Philippines since 2010. The Lotte group is also PepsiCo's beverage partner in Myanmar.
“We are very excited to embark on this new expansion of products in the Philippines. Lotte remains firmly optimistic in our partnership with PepsiCo and PCPPI in serving the food and beverage needs of the Filipino people”, shares Mr. Yeon-Suk No, Chief Executive Officer of PCPPI.
PCPPI recently announced achieving a net income of P192 million during the first quarter of the year, which is 41% higher vs. same period last year while net income margin improved by 60 basis points due to stronger focus on revenue management and overlapping of last year’s pricing rollback. Overall gross margin improved by 170 basis points.