PepsiCo is collaborating with a Chinese partner to construct a Quaker Oats production facility in China. This initiative highlights PepsiCo’s commitment to enhancing its food manufacturing capabilities in the region.
The US-based food and beverage leader has entered into a “strategic cooperation” agreement with Jiangsu Rilong Food Co., committing an investment of approximately 500 million yuan ($68.9 million) for the new facility.
Located in Lianshui County, Huai’an City, within Jiangsu province north of Shanghai, the manufacturing plant will span 100,000 square meters and achieve a production capacity of 160,000 tons for the breakfast cereal line, as detailed in a PepsiCo statement. This facility is set to enhance the food manufacturing landscape in China.
Production is scheduled to commence later this year, with operations spearheaded by Jiangsu Rilong Food.
Chen Jiancong, Chairman of Jiangsu Rilong Food, stated: “Rilong has over 20 years of experience in oatmeal processing and production. Our shared ideals of excellence in quality have fostered a long-term partnership with PepsiCo.”
PepsiCo emphasized that this investment and collaboration aims to bolster local food manufacturing in China. It focuses on healthier options and production efficiencies, catering to the “diversified needs for nutritious cereal foods.”
The partnership seeks to reduce fats, salt, and sugar, while eliminating added monosodium glutamate (MSG), sweeteners, gelatine, and artificial flavorings.
In 2022, as part of PepsiCo’s health initiatives, the company established the China Nutrition Society-Pepsi Nutrition Innovation Center in partnership with the Chinese Nutrition Society.
Changan Xie, CEO of PepsiCo for the Asia-Pacific region, stated: “PepsiCo has been engaged in the Chinese market for over 40 years, consistently committed to long-term growth in China.”
He continued, “This strategic cooperation aligns with PepsiCo’s support of the ‘Healthy China’ strategy. It emphasizes innovative development of healthy food products and reflects our optimism about the Chinese market.”
Currently, PepsiCo operates a “convenient food” plant in Shanghai. The Asia-Pacific region, including Australia, New Zealand, and China, constituted 5% of the group’s total revenue in its 2023 annual report.
China generated $2.7 billion of PepsiCo’s overall revenue of $91.4 billion in 2023, demonstrating modest growth in both food and beverages. The financial outcomes for PepsiCo’s 2024 fiscal year, ending on 28 December, will be announced on 4 February.
