July 01, 2009 - Only days after competitor Coke announced the opening of two new bottling plants in China, PepsiCo announced the opening of a brand new LEED-Certified production plant in Chongqing, with intent to build another five plants in China over the next two years. The announcement reiterates the company’s plan to invest $1 billion in the country as part of an ongoing strategy to expand in emerging markets and broaden its portfolio of locally relevant products.

The facility is designed to use 22% less water and 23% less energy than the average PepsiCo plant in China. To save energy, 75% of the plant's indoor areas feature natural lighting, including skylights in the packing area and warehouse. A roof garden insulates the office building and saves energy for cooling and heating. It also will serve as an educational center for students in the local community.

"This plant reflects our deep and long-term commitment to China," said said Indra Nooyi, PepsiCo chairman and chief executive officer.

"It is also an important milestone in our green journey, on which we are partnering with the Chinese government, industry and others to continue to promote the health and longevity of our planet." A partnership that undoubtedly will include future developments in packaging, as China introduced new packaging regulations on June 1 that are expected to evolve.

The announcement was made during a ten-day visit to China by Nooyi, who is investing the time to learn more about the country by meeting with consumers, employees, customers, business partners and government officials. "Despite the current uncertainty in many parts of the world, we have no doubt that China will remain a powerful engine of global economic expansion," said Nooyi.

The move comes amid other efforts by PepsiCo to establish brand leadership in its fastest growing and second-largest beverage market by volume, after the U.S. What Ms. Nooyi has seen has persuaded her that PepsiCo's approach to the Chinese market "is good, but not good enough. The opportunities are so much bigger." With a population as large as China’s, expansion there will provide superb brand positioning.

The challenge is finding the right blend of products that will reach consumers across generations. The company's "model for China has to be vastly different." Younger populations are a more likely fit for PepsiCo’s existing product markets. But, as the Wall Street Journal reports Nooyi’s called on her executive team to think to think "differently and disruptively," in order to reach an elder population that typically steers clear of packaged fast food products and likes to eat at home.

But there are possibilities for Pepsico yet. When Ms. Nooyi visited the home of a 32-year-old man, his wife, child, parents-in-law and his wife's grandmother she discovered that while having varied consumer habits, the whole family likes to munch on potato chips while watching television.