Pepsi to invest $1B in Russia

ByUSA Today
July 6, 2009, 2:38 PM

NEW YORK -- Soft drink and snack maker PepsiCo PEP said Monday it will team up with its largest bottler, Pepsi Bottling GroupPBG, to invest $1 billion in Russia over three years.

PepsiCo called it part of a long-term strategy to expand in emerging markets. The investment brings the total investment by PepsiCo and Pepsi Bottling Group in Russia to over $4 billion just as President Obama opens his first official visit to Moscow.

The announcement also nearly coincides with the 50th anniversary of the momentous "Kitchen Debate" between then-Vice President Richard Nixon and Soviet leader Nikita Khrushchev, who clashed over communism and capitalism and shared several rounds of Pepsi-Cola on July 24, 1959.

Pepsi in 1974 became the first Western consumer product to be made and sold in the U.S.S.R.

PepsiCo chairman and CEO Indra Nooyi, who will meet this week in Moscow with Obama and Russian President Dmitry Medvedev, said in a statement that the $1 billion investment is part of a long-term strategy.

"This investment reflects very clearly our great confidence in Russia and our long-term commitment to this very important market," said Indra Nooyi, PepsiCo's chairman and chief executive.

The money will be used to boost manufacturing and distribution capacity in Russia, which Pepsi Bottling Group Chief Executive Eric Foss called an "attractive growth market."

PepsiCo is also opening a beverage facility this week in Domodedovo and will open a snacks manufacturing plant in Azov later this year. The PepsiCo plant in Domodedovo will produce Pepsi-Cola and other beverages and will be PepsiCo's largest bottling plant worldwide.

Last November, PepsiCo said it would invest $1 billion in China over the next four years to expand its manufacturing capability, research and development and sales force in the country. That marked its largest investment in China in nearly 30 years.

Later that month, PepsiCo said it would invest up to $3 billion in Mexico in the next five years, including $2 billion on manufacturing, marketing and research and development for its food businesses and $1 billion on marketing and advertising for Pepsi's beverages.

PepsiCo is the world's second-biggest maker of soft drinks behind Coca-ColaKO.

PepsiCo's products are sold in about 200 countries. Its brand portfolio includes Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods.

Pepsi Bottling Group, based in Somers, N.Y., is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages and has operations in the U.S., Canada, Greece, Mexico, Russia, Spain and Turkey.

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