Company Special: Tingyi-PepsiCo alliance in China progressing well

Updated: 2013-10-23 07:19

By Ma Yi (China Daily USA)

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The strategic alliance between Tingyi Holding and PepsiCo is off to a strong start, "generating positive results for both companies since it was formed last year", according to a statement released by the two beverage giants.

Tingyi, maker of the popular Master Kong brand, is one of the leading food and beverage companies in China. Its alliance with global giant PepsiCo was finalized in March 2012.

Following the agreement Tingyi has expanded production and distribution of PepsiCo brands throughout China by adding more than 35 manufacturing lines to produce international PepsiCo products, including both carbonated and non-carbonated drinks.

New products can now hit the market quicker, creating enough supply for retailers, said the company.

Wei Ing-chou, chairman of Tingyi, said he is "happy to see Tingyi-PepsiCo strategic alliance turn out with such achievements".

PepsiCo transferred its bottling operation to Tingyi in 2011. That led to the alliance that was formed last year.

"The alliance will further increase the variety of choices for consumers, generate new business opportunities for our operating bases in central and western China as well as create jobs and boost economic growth in the local communities, thus contributing to the sound and sustained growth of China's beverage industry," said Wei.

Indra Nooyi, chairman and CEO of PepsiCo, who is now visiting China, said that the country is a "dynamic food and beverage market that holds tremendous long-term growth opportunities for PepsiCo".

Company Special: Tingyi-PepsiCo alliance in China progressing well

"Our alliance with Tingyi has been a game-changer for our business in China, as it fuels success by expanding our geographic footprint while driving speed and efficiency in our 'go-to-market' system - action plans for reaching consumers and being more competitive," said Nooyi.

She added that the alliance with Tingyi, as well as PepsiCo's consistent investment in brand building and innovation in food and beverage products, will make China a growth engine for PepsiCo in the future.

With some 100 beverage plants and a nationwide distribution network, Tingyi operates the leading beverage production system in China.

In October 2012, Tingyi set up a new beverage plant in Zhengzhou, Henan province, its first to open after the alliance with PepsiCo.

Tingyi also increased its number of production lines throughout the country, including new operations in Lanzhou, Gansu province, Baotou of Inner Mongolia, Urumqi in Xinjiang and Wujiang district in Jiangsu province.

The new lines are equipped with advanced beverage manufacturing technologies that will raise efficiency in production while reducing water and energy consumption.

The company said adoption of the technologies demonstrates the shared commitment by Tingyi and PepsiCo to promote environmental sustainability, while also reducing operating costs and enhancing the overall competitiveness of the system.

Tingyi is now in charge of manufacturing, selling and distributing PepsiCo's carbonated soft drinks as well as the non-carbonated brands Gatorade, Tropicana and Aquafina.

The two companies also have double branding. Juicy drinks produced by Tingyi use their original names and are branded Tropicana for PepsiCo.

The strategic alliance includes some of the nation's most popular beverage products, including Pepsi, Mirinda, Gatorade and the Master Kong series of tea drinks.

Looking to the future, Tingyi and PepsiCo plan to keep the focus on technology and innovation.

Last November, PepsiCo set up a research and development center in Shanghai as a hub for new product, packaging and equipment innovation that will serve all of Asia. It is PepsiCo's largest R&D center outside the United States.

(China Daily USA 10/23/2013 page15)