The company is already 25 years are presented in Ukraine. What are the key accomplishments you can highlight during this period?
The most important achievement is the way in which we have created our unique business PepsiCo in Ukraine. Because most people associate the company with only one brand RER, while our Ukrainian business has a completely different history and vector.
Obviously, in 1992, when PepsiCo officially entered the Ukrainian market, it was the standard way of development of the business, which began with the category of carbonated beverages. But the real success on the Ukrainian market we associated with an investment in a juice producer No. 1 in Ukraine. After the purchase of the juice business Sandora started the movement to success a new and no less exciting for us by. Thanks to this investment, we not only become a major player in the juice market, but has also created a manufacturing base for the further development of other categories of production: snacks, iced tea, etc., including carbonated drinks in-house facilities.
Today, manufacturing facilities in the Nikolaev area where in the past produced only juice, there is also a line for bottling carbonated beverages, iced tea, production of snacks. Is also seasonal fruit and vegetable processing. We recycle about 30-40 thousand tons of vegetables and fruits from local farmers annually. Also due to the presence of “Sandora” an extensive base of distribution, we were able to significantly improve market position of the company in beverages and senecah.
But that’s not all. Not all are aware that 30% of the portfolio PepsiCo in Ukraine â€” it is also dairy products under the brand “slov’yanochka”, “Miracle”, “Smacznego”, “Agusha”, because globally strategy, PepsiCo is to develop the portfolio of healthy products. In Ukraine we build it on the basis of juices, baby food and dairy products.
Initially, the company preferred to work on the Ukrainian market indirectly â€” the products are bottled at the facilities of other companies. Probably had to fully enter the Ukrainian market?
You need to understand that such major corporations as PepsiCo, strategic decision-making first and foremost, evaluate opportunities and risks. In the 1990s, the level of risk could not be offset by the opportunities that would give us direct investments, so the company was in search of the optimal business model. This prudent approach is justified, given how many periods of instability in the economy of Ukraine we have successfully overcome.
What features of the Ukrainian market for the company?
Business of PepsiCo in Ukraine is developing in the five categories in which the company is represented worldwide: juices, beverages, snacks, dairy products and baby food. One of the indicators that is used by many companies to determine the business potential is consumption per capita. And I can say that today in Ukraine in all categories of consumption per capita is significantly less than that of our neighbors. This means that the business has many opportunities for growth, but they are realized if they are backed by stable economic growth.
The second and most important feature of the market is people. In Ukraine there are professionals who are able to solve any problem. For such a complex business like ours, this is especially important. Our employees belong to the business of PepsiCo, as its own, as manifested in the daily operational work and strategic decision-making. Despite the fact that we are part of a large Corporation, decisions are made quickly, and in that process, not the personal interests and business. This principle we have seen at all levels.
How do you see the further development of the company? In what segments you want to develop?
We have a clear development strategy until 2025. It is based on the principle of “performance with purpose”, which means that we will achieve financial success through a positive impact on planet, people, and products that create.
As I said, the work in the direction of “products” we’ve come this far, because over 60% of the portfolio is juices, dairy products and baby food. Our priorities for the future â€” the launch of healthier products with reduced sugar, salt, fat, and developing those healthy categories, which we have already presented. Typically, this will occur through innovation. As an example, our recent launches of fruit kefir “Words”Yana” in the category of dairy products and fruit drink with pulp citrus “Sandora Frotz”. Also this year launched Pepsi black without sugar, juice “Sandora Fitness”, the new product in baby food “Agusha”, Pasipiko” with an extract of lemon balm.
In the direction of “people”, we will focus on how to further develop the talents of employees and to provide equal career opportunities, regardless of gender, religious and other beliefs of man. And invest in the development of local communities in areas where the company operates.
In the direction of “planet” the challenge before us is to reduce the negative impact on the environment with ever-increasing production. Thanks to the regular efforts here, we have also made progress. So, for the last three years we have reduced energy consumption by 2%, water 12% per ton of product produced, and has reached almost 98% recycling of industrial waste at enterprises in the Nikolaev area. Also in 2013 invested in the start-up of wastewater treatment plants in the production in the Nikolaev area with capacity of 4 thousand cubic meters per day by which the return in the nature of the already purified water.
Did the company improve the investment climate in Ukraine? Easier to do business over the last three years?
It seems to me that in Ukraine there is still work to do for us and for the business and the authorities. But I can definitely say that we hear, and we are steadily building a dialogue between industry and government. In doing so, we help organisations and industry associations. Recently the business has also had more opportunities to speak directly to higher authorities. So I look at everything with optimism and realization that there’s a lot more, but with the support of partners and with mutual desire, and this task is on the shoulder.