Pepsico leads race to World Cup winner Russia with $5.4bn Wimm-Bill-Dann purchase

Yes it’s hardly a household name but Wimm-Bill-Dann controls 30 per cent of the Russian fruit juice and dairy products market, is listed on the New York Stock Exchange and operates in ten countries.

And PepsiCo has decided to shell out $5.4bn, the biggest purchase of a Russian company by an outsider to date, to buy the Western-style business which was only founded in 1992.

Among other things the deal takes Pepsi into milk products for the first time. WBD also owns the J7 fruit juice brand.

WBD’s biggest rival in Russia is Unimilk, 30 per cent owned by Danone which had previously been a WBD shareholder.

One of the reasons the World Cup is important is that, well away from the football, it can prompt a surge of interest and investment in developing countries. Or so the theory goes.

It certainly leads to huge amounts of infrastructure investment although much of this takes the form of empty stadia with too few big events to fill them.

Other companies too will be eyeing Russia and its 140 million population even more eagerly now that it’s been chosen to host the 2018 Word Cup.

They will do so with a certain amount of trepidation, doing business in Russia is hardly straightforward given the influence of former FSB operatives, like current prime minister Vladimir Putin, who need to be kept onside at all costs.

Bob Dudley, who took over from Tony Hayward as CEO of BP recently, was practically a fugitive in Russia for a while when he was running his company’s fraught joint venture with Russian oligarch-owned oil exploration outfit TNK.

PepsiCo is hedging its bets a bit, initially buying 66 per cent of Wimm-Bill-Dann for $3.8bn. Did the World Cup bid play any part in its thinking? We’ll probably never know but it must have had an inkling.

And that name? Apparently the Russian businessmen who set up the company in 1992 wanted an appropriately Western name for their Western-style company.

Maybe something got lost in translation.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.