Blog: Andy MortonGetting lobsters on the shelf in China is not just the snack industry's problem

Andy Morton | 11 July 2012

Cheesy does it

Cheesy does it

A guest blog from PepsiCo CEO Indra Nooyi the Financial Times today caught my eye. The company has just opened a new manufacturing plant in China that, it hopes, will help extend the reach of its Lays potato chips, which Nooyi says have now been tried by 40% of the country's population.

Lays has done well because the company has marketed flavours that fit in with the vast choice of snack options people in China look for. So, instead of boring old beef & tomato, there's hot-and-spicy fish, wasabi, and Sichuan-style hot pot flavours. My favourite when I lived in south-west China was lobster and cheese (see picture), mostly because of the packet's decidedly decadent cover model who seems to be enjoying what can only be described as a cheese waterfall.

Let's hope PepsiCo can be as imaginative with its beverages, even though the need is less - beverages don't have to deal with the traditional range of choice in snacks.

Where the two industries do share a problem is the lack of uniform grocery stores across China. I bought those lobster potatoes chips in WoWo, a chain of convenience stores you'll only find in Sichuan. If I'd been in Shanghai I would likely have bought them in Lawson. Other provinces have their own grocery chains, while there are also the ubiquitous mom-and-pop shops that sell the same things but in one-eighth of the space (and never cold beer). This means manufactures must strike separate deals with all of these regional variations to cover the whole country, severely limiting a company's reach.

Like most things in China, though, it'll change soon enough. The Japanese-owned 7-11, which has been in China since 2004, is expanding rapidly through China's second-tier cities and, from what I could see, is winning the fight against local convenience stores by having clean, brightly-lit units and a good range of items (plus cold beer!).

That's got to be good news for PepsiCo, and fans of lobster and cheese potato chips.


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