PEPSI GROWS POTATOES IN CHINA After entering China in 1982, Pepsi continued to do well in the country, offering a wider range of products than its arch-rival, Coca-Cola. Pepsi’s potato chip business was successful despite competition from other multinational rivals and Chinese domestic brands. As its potato chips became more successful, however, the problem of how to secure a supply of quality potatoes also grew. In the North American market, Pepsi relied on external suppliers for its potatoes. But in China, it ran into problems sourcing locally as well as asking its US supplier to grow potatoes on its behalf in China. The matter was further complicated by the fact that the Chinese government The Simplot story reflected the development of China’s agribusiness industry as it adapted to growing commercial demand. Agribusiness groups that enjoyed some economy of scale slowly began to emerge. Fujian-based Chaoda Modern Agricultural (Holdings) Ltd, the country’s largest non-state-owned agribusiness group, had 29 production bases in 14 provinces in China. It specialised in organically grown fruits and vegetables, supplying its
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Gogoi, P. (23 May 2007) “China’s Growing Exports: Food and Fear”, Business Week Online, http://www.businessweek.com/print/bwdaily/dnflash/content/may2007/db20070523_447291.htm (accessed 21 July 2007). Ibid. 4 Gogoi, P. (23 May 2007) op cit. 5 Dyer, G. (4 April 2007) “Taking the Countryside: Why Agribusiness May Reap Profits and Problems for China”, Financial Times, p. 13. 6 Geng, Z.S., Hou, J.P. and Huang, H.B. (29 March 2004) “The Infinite Commercial Potential of the Potato Market in China”, Yunwang, http://www.yunnan.cn/238/2004/03/29/190@104886.htm (accessed 21 July 2007). 7 Dyer, G. (4 April 2007) op cit. 8 Ibid. 3
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Pepsi Grows Potatoes in China
wholesale and retail businesses across the country as well as its export business.9 Shanghaibased Aisen reared organic pigs in
