PepsiCo leaps forward in Russia with Wimm-Bill-Dann

PepsiCo leaps forward in Russia with Wimm-Bill-Dann

PepsiCo's chief financial officer has told just-drinks that the company does not expect to make any more large-scale acquisitions in the immediate future.

PepsiCo is fully-focussed on completing its tender offer to acquire all outstanding shares in Russia's Wimm-Bill-Dann, as well as integrating its bottlers, PepsiAmericas and Pepsi Bottling Group.

"We're taking a rest for the time being," PepsiCo's Hugh Johnston told just-drinks yesterday (30 March), when questioned on further large-scale mergers and acquisitions on the sidelines of the annual conference of the Consumer Analyst Group Europe (CAGE).

The soft drinks giant is confident that its decision to buy big in Russia will pay off, particularly as the country's economy emerges from a rough couple of years. PepsiCo's takeover of Wimm-Bill-Dann makes it twice as big as its nearest competitor in Russia's food and soft drinks market and, importantly, significantly bigger than The Coca-Cola Co in the key juice market. 

"Russia has good margins compared to many European countries," PepsiCo's CEO for Europe, Zein Abdalla, told analysts at CAGE. "Russian consumers are willing to pay more for added value and convenience."

He added that the group's new scale in Russia also puts it in a good position to absorb any bumps in the road. "It won't be a straight line, but we've built a flexibility in our business model. We know how to hunker down as well."

In the last five years, the contribution of emerging markets to PepsiCo's annual net sales has risen from 21% to 31%.