Suntory PepsiCo CEO: seasoned veteran talking of prospects in Vietnam
Suntory PepsiCo CEO: seasoned veteran talking of prospects in Vietnam
Suntory PepsiCo’s Indian CEO Shankar Sinha talks with VIR about his long corporate career, his recent posting in Vietnam, and market prospects.
Before the merger of PepsiCo and Suntory, you worked for PepsiCo in several countries before coming to Vietnam. Does this new business environment put much pressure on you?
When you arrive in a foreign country, most people look at you and have a lot of questions in their minds. Especially in the CEO position, the key question in their minds is how I would lead the company. For me, the most important thing is to assimilate the culture and integrate my style with Vietnamese colleagues, focusing on promoting their strengths to achieve sustainable business development. I believe that when you treat them with respect, show sincerity, coach and guide them during the rough times, they will definitely come to love you.
Based on your significant store of experiences with the company's products, what was your most unforgettable experience at Suntory PepsiCo?
I am lucky to be one of the first people to enjoy the company's new products. As a leader, every day I and my colleagues experience all departmental activities, which makes me more connected with our products. When Suntory and PepsiCo merged, many employees were worried about a confrontation between the two cultures. However, after four years, we are all satisfied. This was the best experience of my 17-year journey at the company.
Looking back on 23 years of operations throughout which PepsiCo’s brands became the choice of tens of millions of consumers, what do you think set the company’s products apart to earn the trust of customers?
After more than 23 years of development, we have built up absolute trust in consumers by our commitment to quality. Suntory PepsiCo's products are the result of a rigorous global production process, and above all, our passion for creating new products and breakthroughs in the market helped us become a market leader loved by consumers. More than that, our effective marketing activities that bring exciting experiences, or our CSR programmes, are also one of the factors that convinced consumers to believe and choose us. In addition, we are committed to social programmes.
Since the first carbonated soft drinks appeared in the Vietnamese market in 1930, more and more products have been emerging on the market to provide consumers a wide choice. As an industry giant, according to your opinion, did this diversification give Suntory PepsiCo a competitive edge on the market?
Consumers’ taste has changed over the years. Product diversification is something that FMCG companies, especially beverage companies, need to remain relevant. Since the introduction of Pepsi and 7UP in the market in 1994, we now have 13 brands. The diversification of our product line is most certainly a competitive strength of Suntory PepsiCo.
Since you see product diversity as an advantage for Suntory PepsiCo, do you plan any further expansions to meet the "Your choice" criteria?
Along with serious investment in five factories, we also spend more time to do surveys to better understand consumers and preferences to develop new products. At the beginning of 2017, we introduced My Café, which is a combination of Vietnamese milk coffee and Japanese matcha and has since become very popular among young people. Or recently, Sting also launched a new variant called Sting Max Gold. The continuous development and launch of new products will be our constant goal.
Talking about the strategic alliance between PepsiCo and Suntory, what changed at PepsiCo since 2013? How does this "strategic alliance” affect the company’s business direction?
By partnering up with Suntory, one of Japan's leading and oldest beverage companies with great strengths in healthy products, we can provide consumers with a wider choice. Tea Plus Oolong, Tea Plus Matcha, and My Café has been launched and came to be loved by consumers as proof of the success of this strategic alliance.
Sicne April 2013, our strategic alliance has been operating by five principles: Win-Win Economic Proposition; Clear and Comprehensive Joint Venture Agreement; Leveraging the best of Both Parents; Operating Freedom for Speedy Execution; and Trust, Respect, and Transparency between JV Partners.
By promoting similarities and respecting our differences, we have managed to combine the best of Suntory and PepsiCo’s corporate cultures. And so, the journey of change takes us to greater heights. Since then, Suntory PepsiCo has invested more in Vietnam than what the whole business invested throughout the ten years before the joint venture. We currently have 36 per cent of the market share in the Vietnamese liquid refreshment beverage (LRB) industry.
How do you evaluate the business environment in the Vietnamese FMCG sector today? What opportunities and risks do you see in doing business in Vietnam?
Vietnam has strong macroeconomic strength with high growth rate, attracting large foreign investment. There is still ample room in the beverage market as consumption is still lower than in other Southeast Asian countries. If you catch the opportunity, only 2-3 years, you will see signs of rapid development from the industry, not only in the FMCG sector, but more in food and beverage (F&B) industry.
What is the ultimate goal of Suntory PepsiCo’s programmes for the young? What campaigns do you consider would be the most influential on the market?
In the spirit of "Yatte Minahare" ("Go for it"), our aim is to direct the younger generation to challenge and overcome their limits, cultivating themselves through practical experiences. This is an important criteria in our market development strategy. In my opinion, the programme "Chuyen xe mua xuan—Tet sum vay" will resonate deeply with Vietnamese consumers. After more than two years of implementation, more than 10,000 tickets have reached the hands of poor students and workers away from home, giving them joy, helping them visit home during Tet to enjoy family time and bond with their loved ones.
"Sharing the profits with the community" has been playing a central role in Suntory PepsiCo’s activities ever since entering the Vietnamese market. What activities will the company carry out in 2017?
We are aware of our responsibilities to the community and strongly believe that contributing to the sustainable development of the society would reinforce our success and lead to a more sustainable future for our company. Since the beginning of 2017, Suntory PepsiCo has joined forces with the Dynamic Contest, "Mizuku–I Love Clean Water" programme, and has entered into collaborations with various organisations to implement our school building programme, hand out scholarships, support the eye operation and heart surgery of poor patients, especially poor children across the country.
