Thursday, May 31, 2007

Pepsi in India: From Crisis Management to Comeback?

Business Week examines how Pepsi is fighting to regain its reputation in India. An excerpt:

Villagers charged that PepsiCo—which has named India as a top strategic priority—consumes excessive groundwater in their parched communities. Even worse was the repeated claim that the snack and beverage company, along with rival Coca-Cola Co. (KO), were allowing pesticide residue from groundwater to get into locally made soda. The charges, first leveled in 2003, emerged again two months before Nooyi took over the top job. Pepsi's soda sales, which fell by double digits in India when the scandal first broke, took another big hit last fall. She braced herself as protestors smashed bottles on the streets while several states in India banned or restricted sales of soft drinks. Nooyi, now 51, was livid. "For somebody to think that Pepsi would jeopardize its brand—its global brand—by doing something stupid in one country is crazy."

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