forbes (source) :
Trefis Team , Contributor
With online grocery shopping rising at a phenomenal pace, PepsiCo is placing a big bet on the online channel. The company is making an increasing effort to address the growth opportunities across the e-grocery, urban grocery delivery, direct-to-business, and direct-to-consumer models. Keeping this in mind, the snack and soft drink giant has developed a team of roughly 200 e-commerce professionals that has been tasked with capturing growth in this rapidly growing space. Until now, PepsiCo’s efforts seem to be working well, as the company has witnessed tremendous growth through its e-commerce channels.
PepsiCo’s Place In The Fast-Growing Market
PepsiCo’s team of 200 people is made up of seasoned e-commerce and tech professionals, who work in conjunction with the entrepreneurial talent at the company. This unit, which does not function out of the company’s headquarters, was started about two years ago but its workings were revealed just recently. It focuses on the marketing and packaging of the company’s products for online sellers such as Amazon, as well as brick-and-mortar retailers who are trying to build their e-commerce businesses.
PepsiCo’s move in this space seems warranted, as online shopping is growing at a rapid pace. In fact, U.S. online grocery shopping is set to grow five-fold over the next decade, with American consumers projected to spend over $100 billion on food-at-home items by 2025, according to a report by the Food Marketing Institute and Nielsen. The report also notes that the online channel is likely to capture a significant amount of market share from traditional stores. At present, about a quarter of U.S. households buy some groceries online, up from 19% in 2014. This is expected to rise to approximately 70% in the next ten years.
On the company’s recently reported third quarter earnings call, CEO Indra Nooyi stated that Pepsi’s e-commerce sales are set to hit $1 billion in annualized retail sales, with impressive growth rates reported in its key markets. Online sales in the U.S. are set to increase by 80% this year, with those in China expected to double. The company also stated that in many cases, the online share exceeds its offline share, and the company is gaining in the e-commerce space “pretty much across the board.” The initiatives undertaken by PepsiCo are paying off, and bode well for the company going forward.