Since the first Pepsi Cola was produced in China in 1981, the development of the global top 500 Pepsi companies in China has officially entered the “age of no doubt”.
“Today, China is one of PepsiCo’s most important markets in the world and one of its growth engines,” Ramon laguarta, chairman and CEO of PepsiCo, said in a video at the recent celebration of PepsiCo’s 40th anniversary in China According to PepsiCo’s 2020 financial report, the company’s net revenue in China has achieved double-digit year-on-year growth for two consecutive years.
Long Jiade, chairman and CEO of PepsiCo
Behind the growth, the continuous promotion of local innovation has become one of the key driving forces.
Xiaoshidai learned that PepsiCo’s products in China, whether beverage or food, adhere to the principle of “taking Chinese consumers as the center” to develop and manufacture. For example, osmanthus flavored Pepsi Cola, White Peach Oolong flavored Pepsi Cola, Quaker 5 black mixed instant cereal, Quaker wheat crisp are all representative of China’s local products.
According to reports, PepsiCo Greater China has become one of the most innovative food and beverage enterprises driven by digitalization and centered on consumers. It is also one of the FMCG giants with a combination of beverage, leisure food and nutrition products. Just before PepsiCo’s 40th anniversary, the company announced that PepsiCo’s Greater China headquarters was located in Shanghai.
Now, let’s take a look at the “secrets” of this company with Pepsi Cola, Quaker, lexis and other brands in localization innovation.
Speed up innovation
In the rapidly changing Chinese market, accelerating innovation is regarded by many FMCG giants as an effective way to promote business growth, and Pepsi is no exception.
Chen Wenyuan, CEO of PepsiCo Asia Pacific region, said that as one of the first multinational enterprises to enter China, PepsiCo has made remarkable achievements in China in the past 40 years. Together with partners, PepsiCo has established a successful food and beverage business in China, bringing delicious and innovative local products to hundreds of millions of consumers.
PepsiCo Asia Pacific CEO Chen Wenyuan
As early as 2012, PepsiCo Asia R & D center was completed in Shanghai, with an investment of nearly 300 million and a construction area of 20000 square meters. According to xiaoshidai, this is the largest and most integrated R & D center established by PepsiCo outside North America, which is used to innovate and develop new products, new packaging and new equipment in the Asian business, aiming at developing tastes and products that satisfy local consumers.
The establishment of the R & D center gives PepsiCo’s Chinese team more say in product R & D, which means that new products can enter the local market faster. It is reported that before the establishment of the Asian R & D center, PepsiCo’s R & D team was more responsible for how to apply technology transformation, so that the imported products could be produced rapidly in China. After the establishment of the center, the focus of the team has gradually shifted to local R & D and innovation.
PepsiCo said that many product combinations and tastes sold in the Chinese market are mainly decided by the Chinese team, while the global team, including R & D and brand headquarters, is more of a supporting role.
Therefore, on the one hand, PepsiCo’s innovation speed in China has been greatly improved“ In the past, partners in the R & D Department tried to make a Chinese style potato chip, which was sent to the United States first, and then there was a long wait. Because the mountains are high and the waters are far away, it is difficult for the team on the other side of the ocean to make accurate, direct and rapid judgments on the tastes of local consumers. Similar problems have plagued the domestic R & D team until 2012. ” PepsiCo Asia Pacific R & D director Lu Jijun has revealed.
On the other hand, Pepsi also launched more products close to the local culture, thus creating a huge “Chinese flavor combination”. It is reported that in addition to designing new products for the Chinese market, Pepsi will also make localized improvements to imported products.
In terms of drinks, take Pepsi Cola sugar free lime taste as an example, in fact, its concept originated from the western market. Pepsi launched the sugar free lime flavor in the Chinese market, mainly in the hope of entering the catering track through new products and establishing a drinking scene with sugar free lime flavor. After the improvement and deployment of China’s R & D team, this flavor is more suitable for the demand of food.
It is understood that under the promise of “taking root in China, serving China, and joining hands with China”, Pepsi has also launched national flavor products, such as osmanthus flavored Pepsi Cola and White Peach Oolong flavored Pepsi Cola, aiming at the Chinese market in the past two years. This year, PepsiCo’s Gatorade brand also launched a new product “Gatorade light” for Chinese light sports and pan sports groups.
However, accelerating the pace of innovation is obviously not enough. PepsiCo has also worked out a set of methods on how to give consideration to both new speed and new product survival rate.
“ We strive for excellence in the whole process from new product R & D to launch. The Asian R & D center has a set of R & D processes that have passed the market test. ” Pepsi told snack.
The first is to target popular tastes. According to reports, PepsiCo Asia R & D center will regularly analyze the data including the catering business gathering platforms such as public comments, meituan and hungry, focusing on extracting the popular tastes of catering products for analysis in a certain period of time.
“Once something gets hot, we eat it. For example, sauerkraut fish is delicious, but what is delicious sauerkraut fish? It’s said on the Internet that this restaurant is very delicious, so we’ll go there and have a taste, and then we’ll deconstruct the reason for the delicious food. ” Xie Changan, senior vice president and general manager of PepsiCo Inc’s Greater China food business, once said, “this is just like our wine tasting. There are woody, fruit flavors, pre tune, medium tone, etc. we are going to do a deconstruction of taste.”
In the subsequent new product production process, chefs from Pepsi Asia R & D center will also participate. For example, the seasoning powder in potato chips is developed by chefs in cooperation with the seasoning Department of Pepsi Asia R & D center.
Next, the new products that are freshly produced need to go through various intensive and complex evaluations within PepsiCo, including sensory evaluation team, and the tests of representative consumers from all over the world. Only when the test results meet the expectations can the new products be put on the shelves.
At the same time, the full use of data also makes product innovation more accurate.
Xiaoshidai learned that PepsiCo will combine big data and small data to develop innovative products for the Chinese market. On the one hand, we use big data to segment the needs of consumers and explore the consumption trend and direction; On the other hand, with the help of small data, through qualitative analysis of consumer interviews, continuous improvement of product creativity. In the first mock exam of PepsiCo Inc in March last year, the brand of GG applied two new products: Quaker granola and cereal.
It is reported that through cooperation with Alibaba, Guige has mined nine high potential consumers of Pan nutrition categories based on big data classification, and selected two groups from them for key research, so as to achieve targeted product innovation. Among them, Guige large fruit Lactobacillus cereals are mainly targeted at the “delicious Fairy” segment of the population, and are positioned as “innovative and healthy cereal products with patterns, delicious and super ingredients”, especially suitable for breakfast, afternoon tea, snacks and other scenes, to meet the needs of consumers for “beauty, ingredients, delicious and healthy”. Another new product, Quaker black-and-white high fiber oats, is mainly aimed at “petty bourgeoisie and American sports group”.
Quaker black and white high fiber oatmeal
When mining these target groups in depth, we also need to look at “small data”. For example, in order to develop different types of products, Quaker needs to deeply study the consumer demand for cereal and nutritional and health food and the barriers to purchase, especially the differences between consumers of different ages and different city levels.
In addition, PepsiCo’s successful localization is also inseparable from the importance of feedback from front-line staff“ In the past, it was the R & D and marketing team that created the product and then went to understand the consumer’s opinions. In recent years, PepsiCo has increased the integration of internal team working methods and listened to the voice of the front-line sales team. ” Pepsi told snack.
The crayfish flavored potato chips, which are known as “hot money”, are an example. Xiaoshidai learned that in 2019, Pepsi originally planned to launch a Western baked lobster flavored potato chip, and it was almost ready for formal production. But the front-line sales report that Chinese consumers are more familiar with crayfish, and crayfish and lobster are not comparable, so the company has re developed a crayfish flavor product.
It can be seen that PepsiCo’s localization promotion is not blind, but the linkage of market and R & D, with clear objectives, smooth information from top to bottom, and the joint efforts of all departments.
It is worth noting that in the localization innovation, PepsiCo’s food and beverage sectors also have their own focuses.
“Because the consumer behavior of the two categories is different, the product innovation mode is also different. For example, the formula of Pepsi Cola has not changed for more than 100 years, so it is more about the innovation of communication methods, to convey to people that Pepsi Cola is a brand with a long history. ” PepsiCo told xiaoshidai, “the formula of PepsiCo food is flexible and can provide many innovative products for consumers in different regions. So in addition to expression innovation, product innovation is also very important. “
Looking forward to the future, Pepsi will continue to accelerate the localization process and provide more products for Chinese consumers.