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Local brand snacks eat into PepsiCo market

Mumbai, Nov 23 () : Ready-to-eat snacks like Lays and Kurukure of PepsiCo has lost 3% market share as local brands have made inroads into the snacks market.

Local brands like Balaji in Gujarat, Yellow Diamond in Indore and Crax of DFM Foods have eaten into PepsiCo Foods’ popular products. Apart from these local brands, other branded companies like ITC’s Bingo, Haldiram and Parle have stepped up their marketing.

Crax entered the western India market in a big way and also in the northern India belt. The snack market growing at 25% has got equity investment. Indore-based eight-year-old Prakash snacks that produces Yellow Diamond chips got $30 million from Sequia capital. Yet another local brand is A Top that is having a sizeable market in Gujarat.

PepsiCo does not attach much significance to the drop and say that fluctuation happens quarter to quarter. It points out that it has launched around 25 products and has prices ranging from Rs 2 to Rs 55.

The company now is pinning hopes of its Lehar foods division to take on the local brands. On the sidelines, Pepsi tried to buy out Balaji Foods and A Top but talks did not end successfully. Bikanervala is yet another local brand that is eating into Pepsi market.

Pepsi feels that the pricing of local brands was the reason and has created Lehar Foods to take on these local brands.

Corporates like ITC’s Bingo range of snacks and Parle, the leading biscuit and salted snack manufacturer launched Parle namkeens. This with aggressive marketing has good response and the company hopes to get a 20% market share. Uncle Chips with 8.4%, Frito Lay India has 48% share in western snacks and in the bridge category Kurkure still rules the roost but has Balaji’s chatpata with 8% share as a threat. Kurkure Monster Paws and Kurkure Puffcorn are two new products from PepsiCo in this season.