Striving For Perfection

Reported by Hong Phuc

Q: Could you offer some insights into Suntory’s decision to enter Vietnam’s beverage market by purchasing shares in PepsiCo Vietnam?

A: Vietnam’s beverage market has developed by an average rate of 20% per annum over the past five years. The growth figure for tea is even more impressive. Our research indicates the market still has immense potential, with PepsiCo posting a stellar performance. Suntory has many drinks, including coffee and tea, which suit the taste of Asians. PepsiCo wants to capitalize on Suntory’s products and vice versa. With cooperation, we can strive for perfection.

As a newcomer, Suntory will benefit immensely from the vital infrastructure, high-quality human resources and reputation enjoyed by PepsiCo in Vietnam.

We will channel an array of resources into marketing new products. Our staff members who specialize in marketing or sale are competent and excel in teamwork. This will set us apart from our competitors. Customer feedback will be promptly gathered to pave the way for product improvements that suit Vietnamese’s preferences. Ultimately, a successful beverage product should reflect the tastes of local consumers.

Katsuyasu Kato, executive chairman
Suntory PepsiCo Vietnam Beverage Company (SPVBC)

This is a case of a U.S. firm joining hands with a Japanese firm to embark on a project where most staff members are Vietnamese. What are the shared values at Suntory PepsiCo?

Suntory and PepsiCo have enjoyed good ties for over 30 years and know how to manage our differences. Suntory has distributed PepsiCo’s products in Japan for a long time. The firms have worked together to develop Pepsi Nex for this market, which is different from many PepsiCo products and has been a success. Our cooperation extends far beyond Japan and the U.S. and is evident in New Zealand and so on.

We will now join forces to win over Vietnamese consumers. This joint venture has over 2,000 staff members, 99% of whom are Vietnamese. Most shareholders, meanwhile, are Japanese and Americans. While our cultures differ, we respect each other and will put in effort to promote harmony, foster trust, cultivate responsibility and improve the community. Those are the shared values that our companies have embraced for a long time. In Vietnam, we will start a new story together.

A story with an end in mind…?

Our first goal is to conquor the bottled tea market in Vietnam. We will persevere to realize this goal. Since last year, we have prepared to penetrate Vietnam’s market with TEA+ Plus Oolong tea in PET bottles. This product contains OTPP, a natural ingredient extracted from Oolong tea leaves, which prevents fat absorption and caters to health-conscious customers in Vietnam, a country with many tea lovers. We are proud that Suntory’s advanced technology can extract OTPP and use it as a good for health ingredient for bottled tea. Feedback from customers, sellers and distributors has been positive since the product entered the market in early August. We hope for a breakthrough with this drink.

This joint venture also seeks to become the “perfect number one” in the next five years in 2018 maintaining and strengthening our LRB leader position including tea and other new non-carbonated drinks and to be a billion U.S. dollar beverage business.

Will efforts to develop non-carbonated drinks affect the role of carbonated drinks, the company’s strength?

The beverage markets in Japan and Vietnam share many similarities in terms of consumer tastes and lifestyle choices. Judging by the prevailing trend, revenue from carbonated drinks will shrink gradually while that from new products will rise. However, we will strike a balance. At present, we have Pepsi Light. Carbonated drinks with less brix will help the firm maintain its grip on this market segment as efforts are made to explore new products.

Some local firms have a substantial share of the market for bottled drinks. Does Suntory PepsiCo plan to take over them to quickly establish its presence in the domestic market?

We do not intend to do so. Our focus is to make Suntory PepsiCo a market leader.

What is Suntory Pepsico’s strategy?

We will channel an array of resources into marketing new products. Our staff members who specialize in marketing or sale are competent and excel in teamwork. This will set us apart from our competitors. Customer feedback will be promptly gathered to pave the way for product improvements that suit Vietnamese’s preferences. Ultimately, a successful beverage product should reflect the tastes of local consumers.

How will the joint venture sustain PepsiCo’s reputation for corporate social responsibility?

I am amazed at PepsiCo’s excellent ties with local organizations when it comes to community projects. The Dynamic Program has accompanied Vietnamese students for over 10 years, scholarship programs for poor students with excellent studying records, Water Hope project in Quang Nam, heart operation and support to build medical centers are our CSR. We will continue to uphold our social responsibility and contribute to the community. I will play a more active role in Helping Hands programs financed and conducted by our own staffs across the country.

What do you think about the participation of the U.S., Japan and Vietnam in the Trans-Pacific Partnership (TPP)?

TPP will make Vietnam’s market more open, transparent and fair. Every country wants to protect its key industries, but competition also brings opportunities.

TPP is a great opportunity. The U.S., Japan and Vietnam will sign trade agreements. The market for their firms will expand, and that for beverage products is no exception. Our business stands to benefit from such cooperation.

SPVBC in a nutshell

SPVBC is a new joint venture between PepsiCo Inc. (PepsiCo) and Suntory Holdings Limited after Suntory Holdings Limited purchases 51% of PepsiCo’s stake in Vietnam (PepsiCo retains the remaining 49%). Consequently, PepsiCo Vietnam has been separated into SPVBC and PepsiCo Foods Vietnam Company Ltd. (established since February 21, 2013).

SPVBC has officially operated since April 4, 2013. The logo of Suntory PepsiCo has been used since then.

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