Value Foods Organization (VFO): PepsiCo's New Growth Engine?



Case Code : CLBS122
Publication date : 2012
Subject : Business Strategy
Industry :Food and Beverages
Length : 05 Pages


Short Case Study Price: INR 100;

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The case explains how and why PepsiCo developed Value Foods Organization (VFO). It discusses the new distribution channel of VFO. It illustrates how PepsiCo developed a new growth engine for the Indian market and discusses the challenges that VFO could face and the advantages that it could enjoy.


Discuss the rationale for the formation of VFO as a different entity from PepsiCo.
Understand and discuss the distribution channel of VFO.
Understand the challenges faced by VFO's distribution in comparison with PepsiCo's distribution.


In 2010, PepsiCo India Ltd developed Value Foods Organization (VFO), an independent organization, in consultation with Boston Consulting Group (BCG) with the aim of generating new avenues for its growth by catering to the mass market. The setting up of VFO was part of PepsiCo's strategy to combat its continuous loss of market share from 2006.

Though PepsiCo was the leader in the Indian snacks market, its market share had started declining in 2006. The company faced intense competition from players like ITC , Balaji Wafers , and Haldiram's . In addition, there was an increase in the availability of homemade and unorganized snacks, which were tailor-made to suit the lower and middle income groups...

Key words:
PepsiCo, Value Products Organization (VFO), Distribution channel, Cost, Strategy, Targeting, Snacks, Distributor, Business environment, Value products, Channel partners, Mass market, Emerging market

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