![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/03\/MPW-Asia_PepsiCo_-Anne-Tse.jpg?w=2048\")
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When parts of China entered rolling lockdowns during the country\u2019s zero\u2011COVID campaign, PepsiCo factory workers in some \u201cbubbles\u201d stayed on site for up to 30 days at a time to keep production running. A case could halt operations and send workers into quarantine\u2014as happened in June 2020, when confirmed COVID infections at one of PepsiCo\u2019s Beijing factories forced nearly 500 employees into quarantine.<\/p>\n
Anne Tse, who helped run the company\u2019s China operations during the country\u2019s three years of COVID-zero,\u00a0 remembers how they had to change the way they did business.\u00a0<\/p>\n
\u201cWe had to pivot,\u201d Tse told Fortune, \u201cby grouping our markets not by their \u2018market development\u2019 stage, but by their \u2018COVID development\u2019 stage.\u201d In just 12 hours, her team abandoned the traditional model that grouped Chinese cities by the maturity of their consumer markets instead mapped operations around the pandemic: which provinces were entering lockdown, at peak restrictions, or reopening.<\/p>\n
\u201cIt was a crucible,\u201d she remembers, \u201cbut I think about how it trained the character and muscle of our associates,\u201d she says.<\/p>\n
That muscle is now being tested by a new set of pressures after Tse took over PepsiCo\u2019s Asia-Pacific Foods division in early 2025.<\/p>\n
Her mandate spans what she calls three different Asias: emerging markets such as Vietnam and Indonesia, where consumers are buying packaged snacks for the first time; mid-range markets like China and Thailand, where consumers are starting to demand differentiated products; and mature markets including Japan and Australia, where demand centers on health, convenience, and aging populations.<\/p>\n
PepsiCo is pressing ahead in Asia as the food and beverage giant resets in the U.S, following a battle with activist investor Elliott Investment Management, which is pushing for cost cuts and higher margins.\u00a0<\/p>\n
\u201cBy 2030, two\u2011thirds of the global middle class is going to be in Asia,\u201d Tse points out. \u201cWe\u2019re going to add another 700 million of these new middle\u2011class members into our part of the world.\u201d<\/p>\n
Three Asias, three playbooks<\/p>\n
Tse joined PepsiCo in 2010 after stints at McKinsey and Mannings, the health and beauty chain owned by Hong Kong\u2019s Dairy Farm Group. She became CEO for Greater China in 2021, APAC chief consumer officer in 2024, and CEO of APAC Foods in 2025.<\/p>\n
PepsiCo\u2019s Asia-Pacific Foods division generated $4.6 billion in revenue last year, up 2%. While it is PepsiCo\u2019s smallest segment, compared with more than $93 billion in companywide revenue, it is the fastest-growing by volume, rising 4% even as other divisions reported declines.<\/p>\n
Tse oversees a diverse region spanning markets at very different stages of development: Greater China, a vast consumer market with intensifying local competition; developed economies such as South Korea, Japan, Australia and New Zealand, where tastes are mature; and emerging markets across Southeast and South Asia, where incomes are rising quickly.<\/p>\n
\u201cIt\u2019s definitely not one market,\u201d she says, dividing the region into three segments.<\/p>\n
The first is the emerging cohort\u2014including the Philippines, Vietnam and Indonesia\u2014where consumers are crossing the $10,000 annual income threshold and entering the snack category for the first time. \u201cFrom a consumer standpoint, they\u2019re exploring the category, trying different things,\u201d Tse says.\u00a0<\/p>\n
PepsiCo has recently invested $90 million in a snack plant in Vietnam\u2019s Ha Nam province, with annual capacity of more than 20,000 tons, and $200 million in a factory in Cikarang, Indonesia, marking its return to the country after exiting in 2021.<\/p>\n
The second is a cohort of countries, including China and Thailand, where \u201cthings are getting more sophisticated,\u201d leading to a proliferation of new snack options. For example, in China, PepsiCo mines restaurant reviews for insights into what consumers want, turning viral dishes into limited-edition flavors.<\/p>\n
Finally, there are mature markets such as Japan, South Korea, Australia and Singapore, where snacks are already \u201ca way of life.\u201d But consumers are also looking for products that meet broader needs, including health and wellness. Demographic change is also shaping demand. \u201cAging populations need more functional nutrition,\u201d she says.<\/p>\n
Some markets have proved trickier to navigate than others: China is going through a consumer slump and intense price competition, which is bringing down prices even as volume grows. Australia, a more mature market, is also going through a cost-of-living crisis that\u2019s hitting snacking. ASEAN, however, is proving to be a \u201cvery robust\u201d market for PepsiCo\u2019s snacks.<\/p>\n
The local-brand threat<\/p>\n
Last September, activist investor Elliott Investment Management revealed it held a 4% stake in PepsiCo and demanded changes at the company. Eliott pointed out that the company had become a \u201cdeep underperformer,\u201d and argued that it needed to renew its focus on the critical North American market.\u00a0<\/p>\n
In December, PepsiCo agreed to one of its most aggressive restructurings in years, including eliminating 20% of its U.S. brands, cutting jobs, and lowering prices on flagship products. PepsiCo shares have risen about 23% since their low last July.<\/p>\n
Elliott\u2019s arguments only briefly touched on PepsiCo\u2019s international business, citing the company\u2019s global brand strength and the possibility of \u201ccontinued expansion\u201d in overseas markets, due to rising consumer populations and a lower prevalence of GLP-1 weight loss drugs.<\/p>\n
Still, PepsiCo\u2014like many foreign brands\u2014faces intensifying domestic competition. Across sectors from cars to coffee, multinational companies are finding it harder to compete with local products that offer comparable quality at lower prices and better match local tastes. In China, snack brands such as Three Squirrels have challenged global players with fast product cycles and aggressive pricing.<\/p>\n
\u201cNews outlets say the number one challenge of operating in China is tepid consumer sentiment,\u201d Tse says. \u201cBut everybody in the market will tell you local competition is by far the biggest challenge.\u201d<\/p>\n
Last November, PepsiCo released a version of Quaker Oats that combined microbes friendly to gut-health through a fermentation process. The new product combined \u201cChina\u2019s long tradition of fermentation and PepsiCo\u2019s capabilities in modern food science,\u201d Tse wrote in a Linkedin post at the time.\u00a0<\/p>\n
\u201cCompetition is good\u2014we welcome competition because a lot of times competition makes us better,\u201d she says to Fortune. \u201cWe 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.\u201d<\/p>\n
#Asias #playbooks #PepsiCos #Anne #Tse #views #worlds #fastestgrowing #snack #market<\/p>\n","protected":false},"excerpt":{"rendered":"
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