Juices, oats and more: PepsiCo to tap millennials with nutrition push

With 3 products in the space, PepsiCo has tied up with Subway for to let consumers sample them

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Food and beverage major PepsiCo is strengthening its nutrition category to cater to health-conscious younger customers with completely new products and strategies.

The company has created three platforms to address this category, which was launched this year, and hopes that they can add $100 million in business in the coming years. The company has also decided to limit sales of products in this category to select stores unlike its usual strategy for new products.

From the beginning of this year, PepsiCo has been busy focusing on the nutrition category. "Clearly, there is a mandate of 'performance with purpose', where the company wants to transform the portfolio," says Deepika Warrier, vice-president (nutrition category) at PepsiCo India.

Quaker Oats Milk is the third and most recent launch by PepsiCo in this category, which started with Tropicana Essentials Fruit and Veggie, followed by Quaker Nutri Foods. Quaker Oats Milk will cater to the breakfast space, which is estimated to be a $5-billion market.

Offerings from these three platforms will cover about 46-50 per cent of the products consumed in the 'My healthy morning', as PepsiCo calls it. Currently, this growing space is largely unpackaged and underserved. Consumers either have nothing at all or they have something like milk, packaged juices, fruits, and biscuits before they leave home.

The key reason for this focus is that the current generation is not only becoming health conscious but also looking for something which can give them nutrition.

"The combination of customers looking to lead a healthier lifestyle and, therefore, looking for trusted brands which can offer nutrition, along with uncontested morning space, offers a good opportunity for PepsiCo," says Warrier.

"With a unique combination of oats, milk, and fibre, we are excited to pioneer the grain dairy category in India and we believe we are addressing another of our consumers' growing demands for healthy options," says Warrier. The company is marrying two strong brands — Quaker, which is a 130-year-old globally-recognised name, with PepsiCo's SoluOats.

PepsiCo claims it has the first-mover advantage since the current offerings in this segment are mostly flavoured milk products and largely dominated by co-operatives lacking in distribution strength.

The company has partnered with cricketer Sachin Tendulkar to endorse the product.

"Bringing innovative products alone will not help in this category," says Warrier, adding, "These products require a very different kind of marketing and mindset than the other products. It's all about education and creating awareness through various initiatives." According to Warrier, these products cannot just rely on above-the-line celebrity-led advertisements.

Considering that customers today seek more information regarding the nutrition value of products, brands need to give them the reassurance of knowing exactly what the product contains, Warrier adds.

PepsiCo will rely heavily on digital media to educate customers and to create awareness. The company has also joined hands with Subway and a few aggregators to allow customers to sample the new offerings. New tasting zones are also being created.

As far as retail sales concerned, despite PepsiCo's huge network – 100,000 dedicated outlets for Tropicana and over two million for other categories – the company has decided that Quaker Oats Milk will not be distributed so widely. In stead, the particular product will be pushed through organised trade, large retail outlets, and chains. "We are restricting it to the top 10,000 outlets," says Warrier.

The initial focus will be in metros and Tier-I cities, where consumers are looking for more targeted nutrition unlike in smaller towns where fruits and vegetables are still the mainstays. Besides, supply chain-related challenges are also there.

The company is also being careful in choosing the retailers concerned. It has a set criteria, including location and what other products are stocked by the store. "This is not the traditional way of PepsiCo, it is far more targeted," Warrier says.