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40 years of US-China commercial business relations - China Business Review

Wednesday, January 09, 2013

PepsiCo Partnership Becomes Largest Beverage Venture in China

PepsiCo entered China in 1981 when it opened its first bottling plant in Shenzhen, Guangdong. As China’s beverage market has grown—PepsiCo estimates that China will be the world’s largest beverage market in 2015—the company has worked to expand its footprint in the country.

In 2012, PepsiCo announced that it had teamed up with Tingyi Holding Corp. Under the agreement, Tingyi’s beverage subsidiary, Tingyi-Asahi Beverages Holding Co. Ltd., became PepsiCo’s franchise bottler, making Tingyi-PepsiCo the largest beverage venture in China with a national distribution network and more than 70 manufacturing plants.

But PepsiCo’s business in China isn’t only about beverages. In 1993, the company entered China’s food market when it introduced Lay’s potato chips. PepsiCo says that 40 percent of Chinese households have tried Lay’s products.

The company has invested in developing tastes for the Chinese palate, and it recently opened a research and development center in China, its largest outside of North America, to develop products for China and other countries in Asia. Some of the flavors unique to the China market include Lay’s cucumber, hot and sour fish soup, and numb and spicy hotpot flavor potato chips. The company’s oatmeal brand, Quaker Oats, offers quickcooking congee with Chinese medicinal ingredients, such as wolfberry, white fungus, and red dates.