PepsiCo: Adding Value in Potato Supply Chain Through World Class Bulk Potato Stores Technology Presenter: Rajiv Wakhle 4 th International Summit cum exhibition.

PepsiCo: Adding Value in Potato Supply Chain Through World Class Bulk Potato Stores

Technology

Presenter: Rajiv WakhlePresenter: Rajiv Wakhle

4th International Summit cum exhibition on

Food Processing, Agribusiness & Cold Chain.

5th Nov 2012, New Delhi

PepsiCo- Global Fact Sheet

• Second Largest Food And Beverage Company

• Annualized Revenues Of Nearly $ 66 Bn

• Largest Portfolio Of Billion Dollar Food And Beverage Brands- 19

• Employs 285,000 People Worldwide

PepsiCo in India

• Largest Food and Beverage Business in India

• Third Largest FMCG Business

• We provide direct/indirect employment to over 150,000 people

• Pioneering work done in Agriculture and work with over 22,000 farmers

• Largest Food and Beverage Business in India

• Third Largest FMCG Business

• We provide direct/indirect employment to over 150,000 people

• Pioneering work done in Agriculture and work with over 22,000 farmers

PepsiCo’s world class manufacturing facility in Kolkata

Complete automation untouched by hands

Strong agenda on Sustainability

Human Sustainability: To encourage people to live healthier by offering a choice of both enjoyable and wholesome foods and beverages.

Environmental Sustainability: To be good citizen of the world, protecting Earth’s natural resources by innovation and more efficient use of land ,energy, water and packaging in our operations

Talent Sustainability: To invest in our associates to help them succeed and develop the skills needed to drive company’s growth, while creating employment opportunities in the communities we serve.

BiharPotato

PUNJAB Basmati,; Direct seeding of Rice, potato Seed

RAJASTHANBarley, Basmati

KARNATAKAPotato, Direct seeding

TN – Direct seeding

GujaratPotato

MaharashtraPotato

Haryana -: Potato, Direct Seeding

West BengalPotato

PotatoPunjab, Haryana, UP, Bihar, Gujarat, Maharashtra, West Bengal, Chhattisgarh, M.P.Karnataka

Direct SeedingPunjab, Haryana TN, Karnataka,

BarleyRajasthan

Basmati RicePunjabRajasthan

PepsiCo’s Agricultural Footprint

UP -: Potato

Lays - A Flagship Brand and Potato Is Our Biggest Raw Material

India, a second largest Potato producer

Potato production (Million Tonnes) in different Countries-2010

However, In India, processed potatoes currently constitute less than < 5.0 % of annual production

Major Potato producing States in India

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2000

4000

6000

8000

10000

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WE

ST

BE

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NJA

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GU

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M.P

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KHARIF4%

RABI96%

Farmer PepsiCo

Quality based fixed buyback

‘Pay for Performance’ systems to drive quality and continuous supply

Provide technical support and extension services for chip grade farm practices.

Locally evolved Farmer’s Organization

Directly with the Farmer

At PepsiCo, we provide a win-win market linked self sustaining Contact Farming Model

Agri Companies

Banks

Storage Services

Input Companies

Insurance

“Partners in Progress” Model

Seed

Govt

Advantaged Seed

Program support

Central (Jan - March)

East (Jan - March)(Apr-Aug) - Stored Potato

North (Dec – March , Stored Potato (Apr to Aug)

Far South (Aug - Nov)

West (Aug- Nov)

Summer (Kharif) – 25%Aug - Nov

Winter (Rabi) – 75%Jan - Mar

Punjab& Haryana

WB & BiharMP - Indore

MH - Pune

KN - Dharwad

UP-Agra

GJ- Deesa

42

85

118139

195

2003 2005 2007 2009 2011

Potato Procurement (in 000MT)

3000

6000

84509900

13800

2003 2005 2007 2009 2011

All India Farmers Network

PepsiCo initiatives in Potatoes Cultivation in different States

Planting Harvest

Factory

APRIL AUGUST5 months Storage Season

Critical supply period:AugustNov.-Dec.

MAY-JULY AUG - SEPT – OCT- NOV OCT-NOV-DEC

FRESH SEASON

DEC- JAN- FEB- MAR FEB - MAR

Harvest to factoryDirect to factory

4 Months Fresh From South & West

Planting Harvest to STORE

APR-MAY-JUN-JUL-AUG

2800

Km

s

Karnataka

Indore

Pune

1400 Kms/5 days

600 Kms/2days

800 Kms/3 days

Kolkata

Channo

2500

Km

s/8

days

2,06

8 K

ms/

7 da

ys

Quantity and quality issues

Potato Supply Chain

4 Months Fresh Rabi Crop

Published by AAAS

H. C. J. Godfray et al., Science 327, 812-818 (2010)

Total Food Waste in Developed and Developing Economy

Huge opportunity to add value in Transportation/Storage Space

Transportation and Storage are the two of the biggest Controllable Post Harvest Losses

Total Loss

Close to 11 Million tons lost – nearly INR 4800 crores every year ( Assuming Potato Price Rs 4/- per kg)

Huge Wastage in Transportation & Storage – 20% ( 7 Million tonnes - 2800 Crores )

Increases the cost by 30%

20% Loss

INDIA – Losses in Potato Supply Chain

Controlling Losses: Brining Global Modern Cold Stores Technology in India and Intervention in Transportation

Modern Cold Stores- Bulk StoresMaintain Optimum Storage Condition

Long Storage – Losses 3% vs 9%

Improved TransportationLow Bruising and DamageReduce Losses – 1% vs 4%

Bulk Potato Store : A Steep decline in storage losses

Name of File.ppt

Yellow Springs Instrument (YSI): Technical support to monitor potato condition in stores

• The YSI is an enzyme specific biochemistry analyser used to measure sugars in potatoes

• Produces results that are specific for Sucrose and Glucose

Adding Value by Minimizing Loss in Storage Through Bulk Store

• Ensures Predictability - Delivers longer shelf life (8-10 months) with quality produce as compare to 4-5 months in case of traditional stores thereby ensures longer supply windows to industry

• Ensures Quality - Maintains desired storage conditions for process potatoes (Right temperature, humidity &CO2)

• Cost Advantage - Delivers minimum storage shrinkage and rotage losses (3 to 6 %)

Better Predictability

Better Quality

Better Cost

THANKS