PepsiCo plans to invest US$1 billion in China over the next four years, representing the firm’s largest investment thus far in the country, the Wall Street Journal reported. The investment will be used to build more plants, boost the company’s sales force and marketing efforts, and expand research and development of products tailored for Chinese consumers. China is PepsiCo’s second largest beverage market by volume and the investment will heighten the company’s rivalry with Coca-Cola in the country. Coca-Cola in September launched a US$2.4 billion takeover bid for Huiyuan, a local fruit juice maker, though the deal is pending regulatory approval. PepsiCo’s China investment comes as the firm struggles in its home market. The company’s third quarter net profits were dragged down by weak US beverage sales and the firm plans to cut costs by US$1.2 billion over the next three years.
For more on the Coca-Cola-Huiyuan deal, please read this report in the November issue of the magazine.