The cola companies are experimenting with new flavours for the summer season.
Leading players like the Coca-Cola and PepsiCo along with regional players like Kalimark have launched new flavours in the market.
For instance, PepsiCo has rolled out two new variants for its orange drink – Mirinda and plans to launch more new flavours under its brand 7Up.
Kalimark, the popular soft drink manufacturer from the south, has launched a lemonade- flavoured carbonated drink called Solo. However, the company is more excited to launch its another offering called paneer soda which is a rosewater carbonated drink with demand. The company intends to sell a 500 ml PET bottle for Rs 25.
Coca-Cola too has launched Schweppes 300 ml cans in two variants – ‘Tonic Water’ & ‘Soda Water.’ “Our endeavour is to make these products available in all metros and large towns across India,” said a spokesperson from the Coca-Cola.
Carbonated drinks account for the second biggest chunk (28%) of the non-alcoholic beverage market in India. It is growing at a rate of 10-12% annually.
Having huge population base and assorted age groups, supporting the carbonated drinks market has led the market to be of worth around Rs 59 billion in 2011, informed Shushmul Maheshwari, chief executive, RNCOS, a market research firm.
“Though rising health awareness among the young and educated population has led consumers shift more towards fruit-based drinks but the demand for fruit juice will not overtake the carbonated drinks market,” he said. Owing to the growing young population (aged between 16-30 years) that still prefer carbonated drinks over fruit juice, the demand for the same seems to lead the market.
The spokesperson for the Coca-Cola said, “The per capita consumption of our products is only 11. Contrast this to a global average of 89, 32 in China and 675 in Mexico. This just presents us with the challenge of tapping on to this opportunity and making sure that we are the consumer’s choice of beverage every day, every time.”
The company has already announced its plans to invest $2 billion over the next five years starting 2012 to further capture the opportunity in the Indian non-alcoholic ready-to-drink (NARTD) beverage market. It will be investing in innovation, consumer marketing and brand building, expansion of distribution and cold drink equipment placement as well as further development of manufacturing capacity to meet growing consumer demand.
Along with innovation in flavours summers is also the time to change its distribution strategy as the demand for soft drink increases by more than the double. “The beverage companies are focussing to push their sales through innovative distribution strategies across India. They are constantly building wide distribution network by installing several vending machines in malls, food courts, etc. to reach to masses. Moreover, these companies are creating an independent business channel to innovate, sell and distribute its juices, energy drinks and niche products,” informed Maheshwari.
The Coca-Cola spokesperson agreed with Maheshwari. He said, “We follow an OBPPC (Occasion, brand, price, pack, and channel) strategy, which involves making available our soft drink brands in the right pack at the right price, sold through the right channel and driving consumption by linking it with right occasion. Our products are available pan-India and the pack alternatives being made available to consumers really depends on the channel where a consumer is looking for a soft drink. If the need arises, we will surely introduce a new SKU, depending on the consumer’s demand and feedback from the retailers.”
The summer anticipates a cola war with both PepsiCo and both Coca-Cola and Pepsi planning to reduce prices for its 200 ml returnable glass bottle just in time for the summer season. The price reduction, together with good marketing and advertising, could help them sustain their position in the market.
“We are now offering our entry level pack for brand Coca-Cola – the 200 ml returnable glass bottle (RGB) – at a special promotional price of Rs 8.The 200 ml pack being the entry point into the category, will recruit new consumers into the cola segment since it is an innovative and a very attractive price point. The promotional offer is being rolled out in phases across select markets and we have a strong communication program to better optimise the proposition. This initiative neatly dovetails into our Open Happiness consumer proposition and in our belief that happiness multiplies when you share it and touch more people,” said Coca-Cola.
Rural area penetration
One of the biggest challenges in rural market is getting more number of people introduced to consuming packaged beverages. In-addition, distribution of soft drink beverages including making them available in a chilled form is also a challenge.
Hence Coca-Cola India has been continuously thinking about newer and innovative ways to reach out to rural consumers. It has also now created a new vertical called Emerging Markets & Franchise Leadership to drive growth in rural markets.
One of the first products that it has introduced for the BOP segment is the ‘Fanta Fun Taste’ powder sachet for Rs 5 targeting the lower end of the market. It has been launched in a powdered ready to drink segment and is selling successfully in 1,500 retail outlets in Maharashtra and Gujarat.
“Given the challenges of rural marketing, one has to be innovative and think out of the box. Coca-Cola India is continuously thinking about newer ways of reaching out to the rural consumers and introducing them to ready-to-drink packaged beverages,” said the spokesperson.
The rural market in India poses several challenges to beverage companies in terms of expanding their footprint, one of which is the availability of chilled products. One of the biggest challenges in rural market is getting more number of people introduced to consuming beverages in a ready to drink packaged form. In addition, distribution of soft drink beverages including making them available in a chilled form is also a challenge.
Filed Under: F&B
About the Author: