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February 22, 2021

PepsiCo quits Indonesia snacks JV with PT Indofood

PepsiCo has quit a joint venture in Asia, with the US-based food and beverages giant selling its stake to a local partner.

By Dean Best

PepsiCo has quit a snacks joint venture in Indonesia, selling its minority stake to local partner PT Indofood CBP Sukses Makmur. 

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  • Five-year forecasts and the impact of COVID-19
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  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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The US-based food and beverages giant did not provide a reason for its exit from the venture after a 30-year partnership in Indonesia in a statement provided to just-food, although this publication has asked PepsiCo to clarify.

PepsiCo also did not reveal how much it will gain financially from withdrawing from the Lay’s, Doritos and Cheetos snacks partnership – PT Indofood Fritolay Makmur (IFL) – nor the size of the stake.

However, PT Indofood confirmed in a separate statement, filed with the Jakarta Stock Exchange, that it has acquired the 49% holding from PepsiCo for IDR494bn (US$34.9m). Under the terms of the agreement signed on 17 February, the company has six months to end the licensing agreement with PepsiCo.

While the terms carry caveats around the manufacturing and distribution of PepsiCo's snacks, the Nasdaq-listed company will continue to supply Quaker oats products in Indonesia: "We look forward to returning to the market with our products such as Lay's, Doritos and Cheetos as soon as possible, creating more smiles with every sip and every bite."

The statement continued: "IFL will discontinue manufacturing, packaging, marketing, sale and distributing PepsiCo products in Indonesia. For the three years which follows, PepsiCo and its affiliates have agreed not to manufacture, package, sell, market or distribute any competing snack food products in Indonesia.  

"Nonetheless, the outlook for the snacks industry in Indonesia is strong and the market will remain a key part of our long-term growth strategy." 

 

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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