Long live the cola

Aug 29 2014, 16:49 IST
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SummaryCoca-Cola and PepsiCo are on a mission to make colas the most preferred drink of India as the consumer’s liking for carbonated drinks continues to grow despite the availability of healthier options

Step into any retail store and the first thing you will probably notice are the gigantic 2-litre bottles of Pepsi or Coke staring up at you right at the gate. If the cut-outs announcing the myriad offers are not enticing enough, or you insist on gulping down only healthy fruit drinks, walk on to the beverage section. The rows of smartly aligned bottles of Pepsi, Coke, Fanta, Limca, Thums Up, Mirinda, 7Up, Mountain Dew of different pack sizes could just break your resolve. Yes, the healthier option of fruit drinks in Tetra packs are also there. But standing side by side, the prices are telling. A 2-litre bottle of Pepsi comes for R78, the biggest Tropicana 100% pack of 1-litre is at least R99. Dabur’s Real, Tropicana’s main rival, retails at R90 for a similar-sized pack. A 1.2 lit bottle of Slice, the mango-based fruit drink, on the other hand, is priced at R60.

It is this price differential that is preventing the market for fruit based drinks from expanding. Of the R300 billion soft drinks market, carbonated drinks dominate at 95% market share, leaving only a miniscule share of 5% for packaged fruit juices. As P Rashmi Upadhya, associate director, advisory, PricewaterhouseCoopers India (PwC), an audit and consulting firm, puts it, consumers have started thinking seriously on healthy living. However, pricing will inhibit wider adoption.

Deepika Warrier, vice president, marketing, PepsiCo India, which makes Pepsi, Mirinda, 7Up, Mountain Dew, Nimbooz, Slice besides Tropicana, seconds that. “While consumers are more than willing to purchase the 200ml pack of Tropicana for about R20, affordability is a big factor when it comes to the large pack,” she says, adding that there is a long way to go before packed juices become part of the drinking culture.

Till then it is the sparkling beverage category including cola, lemon and orange based drinks that continue to witness a healthy growth. For instance, Coca-Cola in July this year reported that its second-quarter second-quarter earnings dipped, as it notched strong volume growth in Asia but flat volumes in North America, Europe and Latin America. Net earnings at the US beverage giant came in at $2.6 billion, down 3% from the year-ago period. Worldwide volumes grew 3%, with an 8% jump in Asia Pacific thanks to strong results in China, India and other Asian markets. Coca-Cola’s sparkling beverage portfolio in India includes flagship brand Coca-Cola, besides Fanta, Thums Up, Limca,

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