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The biggest bottler in South Asia Ravi Jaipuria-promoted RJ Corp will now be distributing the juice portfolio for PepsiCo. This deal comes across as a precursor to the beverages and snacks maker divesting its capital-intensive business nationally to franchisees.
RJ Corp currently manages the entire North and East bottling of aerated drinks for PepsiCo in India. While PepsiCo had sold the India bottling operations of its fizzy drinks in the two regions to Jaipuria three years ago, the company had kept the distribution of juices entirely with itself.
The move to divest distribution of the juices portfolio is likely to be followed by PepsiCo taking forward plans to hive off its bottling operations of aerated drinks to franchisees in the South and West as well.
There is speculation that PepsiCo may give its bottling in the southern and western regions also to RJ Corp. PepsiCo has at least nine company-owned manufacturing facilities in the two regions.
RJ Corp has diversified business interests with franchises for restaurant brands including Pizza Hut, KFC and Costa Coffee. It sells ice-cream under its own Cream Bell brand and runs grocery retail chain JMart.
India’s packaged juices market is estimated at Rs 2,000 crore, with Dabur’s Real and PepsiCo’s Tropicana being the key players. The sector is witnessing intensified competition, with players such as ITC’s B Natural and Hector Beverages’ Paper Boat giving a tough fight to the category leaders.