No weakening of demand signal has been witnessed yet amid the inflationary environment due to the West Asia war, although it could change going forward, PepsiCo India and South Asia CEO Jagrut Kotecha said.
Noting that the world has been hit by many disruptions in the last five years starting with the COVID-19 pandemic, he said businesses will have to adapt to the new reality of disruptions and overcome the challenge by being agile, consumer-centric and keep ears to the ground, he told reporters in an interaction.
“We have not seen a demand signal weakening yet. That’s good news for us…,” Kotecha said when asked about the sense of demand from the ground amid the current inflationary headwinds.
He further said,”We do understand the sentiments. That is why we are going to keep our ears to the ground and still be humble because these demand signals will change. At what point of time to what degree, I don’t think anyone will be able to predict.”
Companies will have to be closer to consumers and customers and keep modifying their plan according to the evolving situation, he added.
“I don’t think a plan, which any company would have set up last September, October will be the same plan which will exist in December this year, because things are evolving and changing..We are going to take one step at a time. That’s the new success mantra,” Kotecha said.
For PepsiCo India, he said what “we are doing holistically” is working.
When asked about the possibility of price hikes, he said “So far we are holding but again we will have to see quarter by quarter how this is going and then make choices…”
Noting that for most of the food and beverage companies the biggest import material is palm oil along with some cost related to packaging, he said,”We are evaluating on flexibility of the oil, same thing on packaging.”
The global oil price hike is fuelling everything else, he said, adding there are also pressure in India but “as a country we have managed to navigate through that”.
On whether there will be some pressure going forward, Kotecha said,”Yes. The degree of which will depend on how things evolve. Right now I think putting a number or guessing a number will not make sense.”
At the same time, he asserted,”There are consumer demand signals of consumption. We just need to find a way to convert that for us.”
In the each of the challenges that the world has faced in the recent past, he said,”The way we look at it is, there is an opportunity rather than a challenge.”
Kotecha said the company has built up several mechanisms, including efficiency and productivity, in the last couple of years to deal with the challenges and the uncertainty and “it allows us to manage these volatility, leveraging all the levers, not just pricing and just not cost cutting..balancing across and that’s what will keep us in a good place and everyone will have to do that.”
