Pepsi Makes $1 Billion Investment in Russia

New Bottling Plant Will Be the Brand's Largest Globally

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NEW YORK ( -- With attention focused on President Barack Obama's visit to Russia this week, PepsiCo made some news of its own in the country. Chairman-CEO Indra Nooyi announced a $1 billion investment in the country, making it the latest beverage battleground. PepsiCo, in partnership with the Pepsi Bottling Group, plans to expand its presence in the country over the next three years through a variety of manufacturing and distribution investments.

Just this week a new bottling plant was opened outside of Moscow in Domodedovo. That plant is expected to eventually be Pepsi's largest globally. A new snack-manufacturing plant is also slated to open later this year in Azov. Already, Pepsi has invested more than $3 billion in Russia. Last year Pepsi spent about $2 billion to acquire the country's largest juice company, OAO Lebedyansky, in partnership with Pepsi Bottling.

"Russia is a very attractive growth market," said Eric Foss, chairman-CEO of Pepsi Bottling Group. "The investments we're making in our Russia business are creating new jobs, providing us with the flexibility to produce a wider range of beverage offerings for consumers and enabling us to better serve our valued retail partners."

Ms. Nooyi is in Russia attending a business summit called by Mr. Obama and Russian President Dmitry Medvedev. Her trip also coincides with the 50th anniversary of Pepsi's introduction in the country. In 1959, former PepsiCo CEO Donald Kendall introduced the soft drink to Nikita Khrushchev at the American National Exhibition in Moscow. In the early 1970s, Mr. Kendall brokered a deal with the Soviet government, giving Pepsi the distinction being the first Western consumer product to be made and sold in the Soviet Union.

For a taste of what to expect, here's a Russian Pepsi Light ad from 2007:

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