Mateusz Madejski, Business Insider Polska: How many plants does PepsiCo have in Poland? Will there be any new investments?
Bartłomiej Kubacki, Demand Acceleration Director at PepsiCo: We have five plants in Poland, two producing beverages and three producing snacks. We are constantly investing in their development. This applies both to new logistics solutions and automation that increase efficiency, as well as to better matching products to customer needs and new packaging formats.
We also invest in plant development and decarbonization, including: in own solar farms, low-emission solutions or fleet electrification. A very large part of our investments also concerns marketing and brand development. We carry out extensive sponsorship campaigns related to, among others: with Formula 1, the Champions League and the FIFA World Cup. So I can say that we invest in the Polish market virtually constantly.
From your perspective, what does the market and consumers' adaptation to the deposit system look like?
The deposit system has started and is working quite well. Although, of course, there are various challenges, for example those related to the return of individual packages or storing them at home. However, I have no doubt that it's all a matter of time and developing new consumer habits.
From our perspective, preparations for the implementation of the system took over a year. This required packaging changes, new labels and communication with consumers, as well as adapting to changing regulations. Our goal is, above all, to increase the level of packaging recovery and put it back into circulation more effectively.
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The end of “simple division”
How are trends changing when it comes to drinks?
First of all, the market today is much more competitive than a few years ago. In the past, we had a simple division into juices, carbonated drinks and water. Today, the boundaries between categories are increasingly blurred and consumers expect much more variety. A good example is the ice tea segment, which defies classic categorization. Manufacturers must therefore attract consumers' attention more and more effectively and better tailor the product to their needs.
A very interesting trend is the growing popularity of smaller packaging. As the economy grows and society becomes richer, consumers increasingly choose “on the go” products – convenient and easy to take with them. This is visible in almost all FMCG categories. Cans and 0.5 l packages are becoming more and more popular, and price is no longer as important as it used to be. This is a clear change compared to the 1990s, when large, economical packaging dominated.
The cola market has also – I have the impression – changed a lot.
Definitely. In the 1990s, the choice was simple – there was classic Coke and a sugar-free variant. Today, consumers are looking for new products on the one hand, and on the other they still expect products they know well. Therefore, we must combine the development of new variants with maintaining strong, classic products.
A good example is Lipton Ice Tea, which we produce. The number of variants in this category is constantly growing. We introduced a carbonated version, although a few years ago this segment practically did not exist. As the leader of this category, we want to develop it further and offer consumers new product variants and formats.
Which new products go on sale permanently?
There are strategic new products that are intended to stay longer, but there are also seasonal products, dedicated for a short period and supported by special exhibitions or specific events, e.g. the World Cup.
Functional and sugar-free drinks are also becoming more and more important. They used to constitute only 5%. sales, and today their share can reach 15 percent, and in some cases even 30 percent. In larger cities, sales of sugar-free variants are 20-25 percent higher. higher than the market average. We also see that this trend will continue to strengthen – in some Western markets, sugar-free variants are already selling better than classic ones.
It cannot be denied that today's customer is very demanding and trends change quickly. Product life cycles are clearly shortening in virtually all industries, but this is particularly visible in FMCG. That's why large organizations like ours have to act faster and faster – not only to respond to market changes, but often even to anticipate them.
What sells best?
It will come as no surprise that Pepsi remains the leader. The cola drinks category is still key for us – also in terms of sales growth dynamics. Both classic and sugar-free variants are very popular. Lemon Pepsi Twist also sells very well.
Mountain Dew also records very large sales increases, primarily due to the variety of flavors and packaging. When it comes to energy, the market is already reaching a certain level of saturation. We see a huge number of products and categories interpenetrating, which is why isotonics and functional products will become more important in the coming years.
Green onion dominates
What about snacks?
Sharing packaging still has a very strong position – chips remain a product that we willingly share while watching a match or meeting with friends. In the snacks category, specific consumption occasions are very important – summer, May weekend or barbecue season clearly drive demand. Interestingly, record results are usually recorded during Carnival and New Year.
When it comes to consumer trends, the situation is very similar to that of beverages. Large packaging used to dominate, now smaller formats and “on the go” products are becoming more and more popular.
One of the fastest growing categories in our country – which will probably come as no surprise – is oven baked chips, with a lower fat content. The Doritos brand is also developing very well. This is a segment that has been experiencing significant growth for several years, and we are constantly expanding the portfolio of corn snacks under the Doritos brand.
What do you think is the most popular flavor of chips in Poland?
Probably peppers? Or salted chips?
Green onion. Pepper comes second (laughter). Together, these two flavors account for over 50%. sales in Poland! I can already announce that many new products will appear in our offer in the near future. Although of course I can't reveal the details yet.
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