A Case Study: PepsiCo Frito-Lay Engages Potato Outgrowers in India

PepsiCo Frito-Lay, a pioneer in the field of contract farming (CF), first established outgrowing operations in India in 1989. Although PepsiCo does not work with development organizations in support of its CF operations, its years of experience and the story of its India program provide many lessons learned and can serve as a model for other companies that may be thinking about developing CF operations.

This case study of PepsiCo Frito-Lay and its potato outgrowing operations in Pune, India is part of Action for Enterprise’s “Facilitating the Development of Outgrowing Operations" manual.  It provides an overview of the market and PepsiCo operations and looks at the organization’s primary incentives for initiating and maintaining contracted outgrower relationships. The case also presents the key attributes that result in the continued success of its outgrower activities and the outstanding challenges that lie ahead for the company.