South Korea’s Lotte Chilsung Beverage Co. has successfully secured management rights of Pepsi-Cola Products Philippines Inc. with a 73.6% stake as it seeks to expand beyond its home turf.
In 2010, Lotte Chilsung took a 34.4% stake in the Philippines-based operations of PepsiCo, and jointly managed the unit with the headquarters of PepsiCo. Over the years, its stake in the operations grew as Lotte Chilsung preferred the gradual method thereby reducing its investment risk.
Pepsi Philippines bottles and distributes Pepsi carbonated drinks such as its cola and Mountain Dew, as well as sports drink Gatorade and energy drink Sting. It operates 12 factories and 14 sales branches in the Philippines.
With the majority stake, Lotte Chilsung plans to use Pepsi Philippines’ facilities to produce and distribute not only Pepsi brand of sodas but also its own beverages under the brand of Milkis, Chilsung Cider as well as its soju brand Chum-Churum.
It aims to use the Philippines as a springboard for its expansion in Southeast Asia, and then to the global market.
According to a company spokesperson, “Next year will be the first year of us being reborn as a global beverage company. Our exports will expand to the upper 30% range by 2024.”
Pepsi Philippines’ sales climbed to Won 908.7 billion (US$695 million) in 2022, compared to 761.2 billion (US$583 million) in 2021. Lotte Chilsung projected its revenue to exceed Won 1 trillion (US$766 million) in the near future.
Lotte Chilsung is optimistic of the Philippines market due to its substantial 100 million population, its youthful demographic with a strong inclination toward carbonated beverages, as well as its hot tropical climate suitable for beverage consumption and expansion.
