Six months after PepsiCo announced to suspend production and sale of its products in Russia, products are still on the supermarket shelves but are likely to disappear soon. As Reuters reported today, the soft drink giant apparently has stopped making concentrates for its soft drinks in the country only after Reuters made public that dozens of supermarkets, retailers and gyms in Moscow and beyond were selling Pepsi cans and bottles imprinted with July and August production dates from factories in Russia.
"All concentrates have subsequently been exhausted in Russia and production has ended," a PepsiCo spokesperson said on September 8. However, up to today according to the latest news by Reuters, products like PepsiCola, Mirinda, 7Up and Mountain Dew are still widely available in Russia. It seems to take some time before the existing stocks are completely used up.
Russia’s invasion of its neighboring country Ukraine at the end of February prompted protests from countries around the world, forcing companies to sell their Russian subsidiaries or withdraw their products from the Russian market.
PepsiCo doesn't seem to be the only beverage maker that still needs some time to implement its announcements regarding a withdrawal from Russia.
The Coca-Cola Company, which launched its iconic cola in the Soviet Union in 1979, completed its exit in August five months after the announcement, but continues to operate "some chains (Costa Coffee)."However, Coca-Cola is already embroiled in battles against unauthorized imports of its goods.
While major brewing groups like Carlsberg and Heineken already stopped production of its products, AB InBev irritated the market in August by announcing to replace imports of their brands by license production in Russia at their own plants which are run in a joint-venture with Turkish brewer Efes. (inside.beer, 20.8.2022)
But what comes next? In Russia's USD 8.8 billion soft drinks market, local brands are trying to fill the gaps left by Pepsi and Coca-Cola.
Ochakovo, a Russian beverage company producing beer, kvas and non-alcoholic drinks is drastically increasing its bottling capacity for its CoolCola, Fancy, and Street brands, to replace the disappearing stocks of western brands. The company aims to leap from a production of 500.000 hl to 12.5 million hl a year.
Another example is Chernogolovka, a soft-drinks company named for a town outside Moscow, where it was founded in 1998. Since the announcement of western brands to exit the country, the company has more than doubled its presence in hotels, restaurants and cafes so far this year, and is now supplying Russian outlets of fast food restaurants which also have changed hands in the last months.
McDonald’s, for example, sold its Russian business to Serbian entrepreneur and former licensee Alexander Govor. Govor has rebranded the 850 McDonald’s outlets to the name “Vkusno & tochka,” which translates to “Tasty & that’s it.”
Those who are still hesitating, like AB InBev, seem to be waiting for a quick end to the war in Ukraine and a boycott of Russia. If true, AB InBev could have a head start on its peers when things return to normal. However, if the war and all its attendant circumstances last longer, the company is likely to irreversibly damage its image, especially if interest groups call for a boycott of the brands in their western home markets.
