Standing amid rows of yellowish plants running to the horizon, Vicky Huang fretted in September about the fall potato crop at this 1,200-hectare farm operated by PepsiCo Inc., here at the desolate edge of the Kubuqi desert. Thousands of tons had to be harvested for the company's Chinese potato-chip business before temperatures plunged and tubers began splitting apart in the ground.

Ms. Huang pulled a small, round spud out of the soil, rubbed off its brown skin with her thumb and shook her head. "They need 20 more days," she said. After concluding a decade ago that Coca-Cola Co., Atlanta, held an insurmountable lead in soft drinks across much of the world, Pepsi embarked on a risky gambit in China and other key markets -- one that relies increasingly on potatoes, not just soda pop.

Pepsi decided to build its global presence by dominating snacks and other packaged foods, much as its Frito-Lay and Quaker businesses had helped battle Coke in the U.S. But pulling that off outside North America was far more complicated, ultimately forcing Pepsi to become something it had never intended to be: a farmer.

The 37-year-old Ms. Huang, who initially knew little about agriculture, today oversees two Pepsi potato farms in China -- as well as a sprawling effort to encourage local farmers to produce more and better potatoes for the company. In addition to its farms here and in Beihai, on China's southern coast, Pepsi has budding potato programs in Russia, Poland and South Africa. The company also helps farmers grow corn for chips in Egypt, oranges for juice in India and plantains for chips in Colombia.

The work is critical in order for Pepsi to sustain double-digit profit growth. North America still accounts for 75 percent of the company's profits, but salty snacks and sodas are losing favor with calorie counters in the U.S. Pepsi's international profits now are taking up the slack, increasing nearly three times as fast as those in North America.

The Pepsi farms illuminate an intriguing new thread in the changing global economy. Large Western corporations used to rely on their own big overseas plantations -- growing bananas, rubber and other commodities -- to fulfill huge U.S. demand. In the late 20th century, multinational companies divested many of those assets, turning to far-flung, independent suppliers for raw materials.

Now some companies -- anxious to capture booming legions of middle-class customers in distant lands -- are reviving elements of the old system so they can better control local supply chains. McDonald's Corp., of Oak Brook, Illinois, for example, is helping grow lettuce and tomatoes in Guatemala and Panama. Smithfield Foods Inc., of Smithfield, Virginia, is raising hogs in Poland and Romania. Recent efforts such as these show that the opportunity for growth in emerging markets is too big to ignore -- regardless of the hurdles.

Despite battles with sandstorms, pestilence, antiquated agricultural practices and state bureaucracy, Pepsi has emerged as China's largest private-sector potato grower, according to government officials. "PepsiCo is not a farming company," says Bob Shi, operations director for Pepsi's snack business in China. "But to build a market we had to take extra steps like this."

Pepsi's current challenge: it needs tens of millions of spuds as it tries to persuade more Chinese consumers to munch on Lay's potato chips instead of seasoned seaweed and other traditional snacks. Sales of Western-style foods are growing fast in China as Wal-Mart Stores Inc. of the U.S. and Carrefour SA of France and other large retailers expand here. Catering to local tastes is also key. Pepsi's chip line-up, for example, includes green-tea flavored Lay's.

Not any potato will do. Each must be precisely the right variety, grown into an ideal shape and size and available on the exact schedule necessary to supply the Purchase, New York, company's chip factories in Beijing and Shanghai. Potatoes grown by local farmers don't always make the cut. Unless they are handled as delicately as eggs, they risk bruising -- a common side-effect of China's manual farming techniques and crude distribution methods. To ensure the yellowish color of its Lay's chips, Pepsi also requires potatoes to be low in both sugar and water content. The ideal specimen is about as large and round as a baseball.

Pepsi's potato strategy took shape in the mid 1990s, when it began pushing snacks as a countermeasure against a faltering overseas soda business. Michael White, a former Pepsi finance chief and now head of the company's international division, had to go before the Pepsi board in 1996 to explain a $576 million write-off for the company's failed overseas soda expansion."That was an enormous wake-up call," Mr. White says.

"We were throwing money at emerging markets without having built the experience at the local level to execute." Pepsi didn't want to repeat those mistakes. To ramp up its overseas snacks business, it was going to have to hire and groom more native talent -- people like Ms. Huang.

After graduating from a Shanghai university with an engineering degree, Ms. Huang worked at a government factory making pens in the early 1990s. By the age of 27, she was bored. Co-workers read novels on the job. Despite her poor English, Ms. Huang jumped on a friend's tip about a position at Pepsi's fledgling agriculture department. She started there as an office assistant in 1995.

The company had just begun to experiment with chips in China, using locally grown potatoes. One of Ms. Huang's first assignments was to board her scooter at 2 a.m. and ride to a Shanghai vegetable market to buy potatoes before they sold out. Though hard won, these local varieties often failed in the fryer. The chips came out dark, in some cases even black, or had a bitter taste.

Pepsi wasn't able to introduce Lay's in China until 1997, when a government-run farm sold the company about 2,000 tons of potatoes. That was enough for a three-month run on store shelves in Shanghai. Pepsi imported additional bags of Lay's until the next crop could be harvested. Shipping crushable chips didn't make sense for long, given the high cost. Pepsi cancelled the launch of Lay's three times in Lanzhou, a bustling city in central China, because of a lack of spuds.

Over the next two years, Pepsi amassed a supply of about 20,000 tons of potatoes from state-run farms and village cooperatives. The quality, however, was disappointing. Many fields were tilled with oxen-pulled plows, and harvested by hand. Workers stepped on the potatoes or tossed them roughly into trailers and rail cars.

The company, meanwhile, had been scouting for land to build a demonstration farm where it could teach Chinese farmers -- potential suppliers -- new growing techniques. Government officials suggested the tract in Inner Mongolia, which despite its desert terrain, has a summer climate conducive to potato growing.

When Pepsi arrived in 1998, it was a barren plot surrounded by three-meter-high sand dunes and scattered graves. Local villagers lived nearby in mud-brick homes and burned corn stalks for heat. Blinding sandstorms stung the area in the spring. Still, Pepsi found it to be adequate, leasing the land and planting trees and grass to shield the soil from the sand.

Ms. Huang wasn't impressed on her first visit. Having improved her English, she had worked her way up the potato ranks to a planning job when she was sent for a field visit. No one was there to greet her at the airport, an hour away. Heavy rains had washed out the only road to the farm. Ms. Huang hopped aboard a tractor, which ferried her across the water. "We had a lot of work ahead of us," she recalls.

For the next two years, Pepsi welcomed farmers and government officials to Inner Mongolia. It showed them how far apart potatoes should be planted, how best to fertilize and harvest, and how to increase production with tractors and irrigation equipment. Progress was slow.

In 2001, with demand for its chips rising, Pepsi decided its potato lab needed to be a full-production farm. The company already had invested millions of dollars in two chip plants and couldn't risk shutdowns from potato shortages.

So Pepsi recruited a veteran, bringing Black Gold Potato Sales of Grand Forks, North Dakota, to China. Pepsi figured the company, one of its biggest suppliers back home, could quickly boost the Chinese farm's yield.

Shortly after planting its first crop in May 2001, Black Gold applied a fungicide to ward off disease. It had the same name as the chemical used at its U.S. farms, but Black Gold ordered the chemical from a Chinese company. It wasn't the same.

Weeks later, green potato plants weren't sprouting. Gregg Halverson, owner and president of Black Gold, believes the fungicide included fillers that killed the potatoes. More than half the crop was lost, and Pepsi was short 3,000 tons. Black Gold, which continues to supply Pepsi in the U.S., didn't come back the next season. Mr. Halverson says conducting business in China was difficult, from ordering tractor parts to communicating to workers. He also had concerns about returning at a time when severe acute respiratory syndrome, or SARS, was spreading in China.

Mr. Shi, the snack-operations executive, handed the farm over to Ms. Huang. The petite city-dweller wasn't afraid to get dirt on her white Pepsi knit shirt and blue jeans. "She's aggressive," says Mr. Shi, who was impressed by her willingness to take on challenges and her ability to foster teamwork.

At first, though, she was nervous. Despite her interest in farming, she was no expert on potatoes. Managing the farm also meant time apart from her husband and young daughter in Shanghai for weeks at a time. "I had to start from zero," she says.

As a boss, Ms. Huang moved quickly. She put in a road to replace the one that had washed out before her first visit. She posted large sheets of paper on an office wall to carefully track each field and explain in detail what needed to be done with fertilizer, pesticides, watering and other tasks. That pleased Pepsi's 30 local farm employees, many of whom had been uncertain of their jobs under the U.S. managers.

Ms. Huang's first two harvests in 2002 and 2003 exceeded company goals, helped by ample rainfall and more-disciplined execution by employees. In early 2004, Ms. Huang was promoted to oversee all Pepsi potato production in China.

Thanks in part to her efforts, Pepsi is the potato-chip leader in China. In 2004, the company boasted a nearly 40 percent share of a $50 million-a-year market, according to market research firm Euromonitor. This year, Pepsi added a fourth Chinese chip plant to keep pace with sales that rose 50 percent in the third quarter.

Its overall percentage of China's $3-billion-a-year snack industry remains in the low single digits, however, since many Chinese still prefer duck gizzards and other traditional snacks. Other U.S. companies are pursuing the Chinese snack market as well, although none has invested as much in local production as Pepsi. Procter & Gamble Co., of Cincinnati, for instance, ships Pringles chips to China from its two plants in the U.S. and Belgium.

Pepsi's two farms still produce only about 40 percent of the potatoes Pepsi needs in China. To spur growth, Ms. Huang must further expand the Pepsi crop and persuade more Chinese to grow potatoes. Though cheap labor is plentiful, Pepsi has pushed for local farmers to use more mechanical equipment to increase crop size and quality -- going so far as to help them acquire tractors at reduced rates. But even large state-run facilities are reluctant to change. At such farms, it takes about a week for 200 workers, toiling from dawn to early evening for 30 yuan -- or $4, a day -- to harvest a 75-acre field. Using the latest equipment, the Pepsi farms can accomplish the same amount of work in less than 48 hours.

On a recent day at Pepsi's farm in Inner Mongolia, tractors tipped their loads onto a conveyor belt. A dozen villagers hired for the harvest sat on crates watching the potatoes roll by and plucking out those with defects. The rest of the potatoes rolled untouched into a large truck. Ms. Huang calculated that the fall crop would yield 1,000 tons more than the 18,000 originally projected -- if the potatoes she dug out with her bare hands that morning fully matured before cold weather set in.

Pepsi still needs more. That night, on the way to a government-run farm several hours away, Mr. Shi illuminated his BlackBerry to read an email from his boss in Shanghai. Wal-Mart and other big retailers were becoming restless about Lay's shortages on Chinese store shelves. The chip-production goal had been increased again to meet rising demand. His shoulders slumped.

"We're under a lot of pressure from the sales guys," he said. "It's growing too fast."

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