Store Brands Expected to Reign Even After Economic Recovery
(Store Brands Decisions) A new PLMA/GfK consumer study indicates shoppers are beginning to loosen purse strings, and economic recovery is not expected to thwart store brands growth. (Click HERE for full story.)
Americans Still Cutting Back on the Little Things to Save Money
(PRNewswire) There are many big changes people can make to save money – cut back on all entertainment, for example. But there are also a number of smaller things people can do to save money, and with the economy not yet turning around, it seems many Americans have opted for this approach. (Click HERE for full story.)
Kroger Tests Fully-Automated Checkouts Instore
(Planet Retail) Kroger in the US has become the world’s first retailer to deploy a fully-automated tunnel scanner at the checkout, making manual item scanning by staff as well as by shoppers redundant. (Click HERE for full story.)
Olive Oil Study Questions 'Extra Virgin' Claims
(Submitted by Mara Flynn-Rothman, Business Manager, Pleasanton, CA)
(MSNBC) Many of the olive oils lining supermarket shelves in the United States are not the top-grade extra-virgin oils their labels proclaim, according to a report from the University of California, Davis (Click HERE for full story.)
Fred Meyer Drops Plastic Bags at Portland Stores
(Oregon Live) Paper or plastic? A lot of folks would rather you say, "Neither." (Click HERE for full story.)
Study: Picky Eating Does Not Harm Autistic Children
(Reuters) Children with autism tend to be picky eaters, but a new study suggests that their growth may not be impaired because of it. (Click HERE for full story.)
PepsiCo's CEO: C-stores Offering Better Value
(Convenience Store News) Although PepsiCo Inc.'s second-quarter net income fell 3 percent on foreign currency fluctuations and charges to integrate its bottlers, sales at convenience stores have started to rebound, according to a report by The Associated Press. (Click HERE for full story.)
New RFID Tags Could Mean No Waits in Grocery Cues
(RFID World) The workings of grocery shopping could change completely if and when the introduction of RFID tags on merchandise is put into place. (Click HERE for full story.)
Delay of Food Safety Bill Stirs Tensions Between House and Senate Democrats
(The Washington Post) Frustration over a food safety bill that is stalled in the Senate has prompted infighting among some prominent Democrats. (Click HERE for full story.)
ConAgra completes sale of Gilroy Foods Business
(Bloomberg Business Week) ConAgra Foods Inc. says it has completed the sale of its Gilroy Foods & Flavors business to Olam International. (Click HERE for full story.)
Coke Gains on Pepsi in Pakistan: 15 Bottles Per Person and Counting
(The Wall Street Journal) PepsiCo Inc. used cricket to entrench its brand in Pakistan. Coke is fighting back with music.
In the late 1990s, Pepsi held an unassailable 80% share of the carbonated drinks business in Pakistan, making this Muslim-majority nation of 175 million people one of its most important global markets.
Pepsi was able to lock in key sponsorship deals—notably of Pakistan's popular cricket team—that made it a more ubiquitous brand than Coke.
Coca-Cola Co. has been mounting a challenge and clawing back some market share. The company recently bought out its Pakistan bottling operations after years of quality-control problems with local franchisees.
Earlier this year it announced plans to invest $300 million into the operations, including the retrofitting of a factory in Lahore, a rare bit of good news for investment-starved Pakistan.
Another part of its strategy has been to chip away at Pepsi's dominance of marketing to Pakistan's youth by sponsoring "Coke Studio," a local version of "MTV Unplugged" that has become wildly popular this year, even across the border in India. Appealing to young people is crucial: More than half of Pakistan's population is under 19 years old.
"Coke Studio" fuses traditional and Western styles, allowing artists to reinvent old songs, such as by bringing a sitar player into a rock band. The "Coke Studio" Facebook site has almost 250,000 fans.
"'Coke Studio' has been one of the most popular advertising strategies by anyone in this country," says Pir Saad Ahsanuddin, former chief executive of the investment board in Punjab, the Pakistani province of which Lahore is the capital.
Atlanta-based Coke doesn't break out numbers for individual countries, but says Pakistan is among its 15 fastest-growing markets globally. "We are looking to become market leaders in [the] near future," boasts Kadri Ozen, a spokesman for Coca-Cola in Asia.
In Pakistan, per-capita consumption of eight-ounce Coca-Cola products tripled over the past decade, according to Coke's 2009 annual report. But Pakistan's per-capita consumption was still only 15 bottles a year, meaning there's huge room for growth as incomes rise. In Mexico, which has the largest per capita-consumption of Coke products, the figure was 665 bottles per head in 2009.
Ghazi Akhtar Khan, managing director of Pepsi's local bottler for Lahore, says Pepsi's share of the market for carbonated soft drinks is currently 65% to Coke's 30%. He concedes, though, that a decade ago Pepsi had 80% of the market. Pepsi sold 240 million cases of 24 bottles each in Pakistan last year, while Coke sold around 140 million cases, according to Mr. Khan.
A spokesman for Pepsi, which is based in Purchase, N.Y., confirmed the current market share but declined to comment further.
The battle is being most fiercely fought in Lahore, a city of eight million people near Pakistan's eastern border with India. Mr. Khan estimates that Coke is only marginally trailing Pepsi in the city.
Both companies are sending out marketing executives to put their branded refrigerators in stores. Pepsi recently introduced Mountain Dew, which has become a hit.
"It's being fought very viciously," Mr. Khan said.
Coke and Pepsi's battle in Pakistan shows how some foreign companies remain committed and are expanding here even as others head for the exits because of concerns over terrorism and the country's struggling fiscal position.
Tetra Pak International SA, the Switzerland-based packaging company, is about to complete a €90 million ($116.5 million) factory in Lahore. Metro AG, the German retailer, has invested $175 million to open a string of outlets in the past two years. Adidas AG of Germany has recently ramped up orders of soccer balls from Pakistan, one of the world's largest suppliers.
Others, like U.S.-based Procter & Gamble Co. and Nestlé SA of Switzerland, continue to make healthy profits here. Nestlé, for instance, operates Asia's largest dairy-processing factory in Punjab, Pakistan's largest province.
An upsurge in terrorist suicide attacks and a balance of payments crisis, which led to an $11 billion International Monetary Fund bailout program in 2008, have scared off other businesses. Foreign direct investment in Pakistan fell 39% to $12 billion in the year to July, according to central bank figures. Still, countries like Pakistan continue to matter for consumer-goods companies because they have young populations and growing economies. The economy is set to grow over 4% this year and Pakistan regularly beats out nations in the region, including India, in the World Bank's study on ease of doing business.
Coke said sales volumes fell 2% in North America in the first quarter of 2010 but rose 11% in its Eurasia and Africa division, which includes Pakistan.
Pepsi remains bigger in some Middle East nations, where an Arab League boycott of Coke in the 1970s and 1980s—stemming from its investments in Israel—left the playing field open.
In other emerging markets like China, India and Russia, the two rivals are locked in a close race.
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