When elements of China entered rolling lockdowns through the nation’s zero‑COVID marketing campaign, PepsiCo manufacturing facility staff in some “bubbles” stayed on web site for as much as 30 days at a time to maintain manufacturing operating. A case might halt operations and ship staff into quarantine—as occurred in June 2020, when confirmed COVID infections at one in all PepsiCo’s Beijing factories pressured practically 500 staff into quarantine.
Anne Tse, who helped run the corporate’s China operations through the nation’s three years of COVID-zero, remembers how they needed to change the best way they did enterprise.
“We had to pivot,” Tse advised Fortune, “by grouping our markets not by their ‘market development’ stage, but by their ‘COVID development’ stage.” In simply 12 hours, her crew deserted the normal mannequin that grouped Chinese language cities by the maturity of their client markets as a substitute mapped operations across the pandemic: which provinces have been getting into lockdown, at peak restrictions, or reopening.
“It was a crucible,” she remembers, “but I think about how it trained the character and muscle of our associates,” she says.
That muscle is now being examined by a brand new set of pressures after Tse took over PepsiCo’s Asia-Pacific Meals division in early 2025.
Her mandate spans what she calls three totally different Asias: rising markets similar to Vietnam and Indonesia, the place customers are shopping for packaged snacks for the primary time; mid-range markets like China and Thailand, the place customers are beginning to demand differentiated merchandise; and mature markets together with Japan and Australia, the place demand facilities on well being, comfort, and growing old populations.
PepsiCo is urgent forward in Asia because the meals and beverage large resets within the U.S, following a battle with activist investor Elliott Funding Administration, which is pushing for price cuts and better margins.
“By 2030, two‑thirds of the global middle class is going to be in Asia,” Tse factors out. “We’re going to add another 700 million of these new middle‑class members into our part of the world.”
Three Asias, three playbooks
Tse joined PepsiCo in 2010 after stints at McKinsey and Mannings, the well being and wonder chain owned by Hong Kong’s Dairy Farm Group. She turned CEO for Better China in 2021, APAC chief client officer in 2024, and CEO of APAC Meals in 2025.
PepsiCo’s Asia-Pacific Meals division generated $4.6 billion in income final 12 months, up 2%. Whereas it’s PepsiCo’s smallest section, in contrast with greater than $93 billion in companywide income, it’s the fastest-growing by quantity, rising 4% at the same time as different divisions reported declines.
Tse oversees a various area spanning markets at very totally different phases of improvement: Better China, an enormous client market with intensifying native competitors; developed economies similar to South Korea, Japan, Australia and New Zealand, the place tastes are mature; and rising markets throughout Southeast and South Asia, the place incomes are rising shortly.
“It’s definitely not one market,” she says, dividing the area into three segments.
The primary is the rising cohort—together with the Philippines, Vietnam and Indonesia—the place customers are crossing the $10,000 annual earnings threshold and getting into the snack class for the primary time. “From a consumer standpoint, they’re exploring the category, trying different things,” Tse says.
PepsiCo has lately invested $90 million in a snack plant in Vietnam’s Ha Nam province, with annual capability of greater than 20,000 tons, and $200 million in a manufacturing facility in Cikarang, Indonesia, marking its return to the nation after exiting in 2021.
The second is a cohort of nations, together with China and Thailand, the place “things are getting more sophisticated,” resulting in a proliferation of recent snack choices. For instance, in China, PepsiCo mines restaurant opinions for insights into what customers need, turning viral dishes into limited-edition flavors.
Lastly, there are mature markets similar to Japan, South Korea, Australia and Singapore, the place snacks are already “a way of life.” However customers are additionally on the lookout for merchandise that meet broader wants, together with well being and wellness. Demographic change can also be shaping demand. “Aging populations need more functional nutrition,” she says.
Some markets have proved trickier to navigate than others: China goes by way of a client droop and intense value competitors, which is bringing down costs at the same time as quantity grows. Australia, a extra mature market, can also be going by way of a cost-of-living disaster that’s hitting snacking. ASEAN, nonetheless, is proving to be a “very robust” marketplace for PepsiCo’s snacks.
The local-brand risk
Final September, activist investor Elliott Funding Administration revealed it held a 4% stake in PepsiCo and demanded modifications on the firm. Eliott identified that the corporate had change into a “deep underperformer,” and argued that it wanted to resume its give attention to the crucial North American market.
In December, PepsiCo agreed to one in all its most aggressive restructurings in years, together with eliminating 20% of its U.S. manufacturers, reducing jobs, and decreasing costs on flagship merchandise. PepsiCo shares have risen about 23% since their low final July.
Elliott’s arguments solely briefly touched on PepsiCo’s worldwide enterprise, citing the corporate’s world model power and the opportunity of “continued expansion” in abroad markets, as a consequence of rising client populations and a decrease prevalence of GLP-1 weight reduction medication.
Nonetheless, PepsiCo—like many international manufacturers—faces intensifying home competitors. Throughout sectors from automobiles to espresso, multinational corporations are discovering it tougher to compete with native merchandise that supply comparable high quality at decrease costs and higher match native tastes. In China, snack manufacturers similar to Three Squirrels have challenged world gamers with quick product cycles and aggressive pricing.
Final November, PepsiCo launched a model of Quaker Oats that mixed microbes pleasant to gut-health by way of a fermentation course of. The brand new product mixed “China’s long tradition of fermentation and PepsiCo’s capabilities in modern food science,” Tse wrote in a Linkedin publish on the time.
“Competition is good—we welcome competition because a lot of times competition makes us better,” she says to Fortune. “We need to play both games: learn from the locals to be agile, but also preserve what makes us unique and able to transcend business cycles.”
