After the pandemic took the fizz out of two consecutive summer season sales, the carbonated beverages industry is banking on the summer of 2022 to make a comeback. Soft drink majors, led by PepsiCo India and Coca-Cola India, are strengthening their partnerships with e-commerce and hyperlocal players to reach the last mile and expand their rural reach.
According to a Research and Markets report, the carbonated beverages segment in India stood at `13,460 crore in FY20, and is expected to reach `34,964 crore by FY27, expanding at a CAGR of 15.12% during the FY 22-27 period.
Fizzy ambitions
“This year, the goal will be about maintaining an omnichannel presence in terms of availability and consumption,” says a PepsiCo India spokesperson. PepsiCo is strengthening its distribution network, both through traditional and e-commerce channels, to cater to consumers across urban and rural geographies. It has been actively partnering with platforms such as Udaan, BigBasket and Swiggy since the onset of the pandemic.
The company, in the last two to three months, has seen an increased demand through online platforms, both in terms of household penetration and repeat orders/ frequency.
Tish Condeno, senior director, sparkling flavours, Coca-Cola India and Southwest Asia, shares that in the fourth quarter of CY21, the company witnessed triple-figure growth in e-commerce sales over the
corresponding period in the previous year, and has hence accelerated investment plans behind digital initiatives in 2022.
Parle Agro is working on an SKU-driven strategy to reach out to consumers for in-home consumption. It has launched Appy Fizz and B Fizz in 160 ml PET bottles at a low price point of `12, which may help bolster its reach in regional markets.
Anurag Mishra, principal, Kearney, predicts a robust double-digit volume growth this year as sales at hotel, restaurants and cafés, as well as modern trade, continue to improve. Brands are expecting increased sales from out-of-home consumption as cities limp back to normalcy, supported by an early and unusually hot summer.
However, the overall loss of sales during the pandemic is unlikely to be compensated by incremental sales during the summer season. “Although the sales of cold drinks should be fairly robust this year, out-of-home consumption might take another two to three years to reach pre-pandemic levels,” Mishra says.
Marketing blitzkrieg
Nadia Chauhan, joint managing director and CMO, Parle Agro, however, maintains that the firm has witnessed a revival in out-of-home consumption as consumers have resumed their daily commute. The company’s marketing budget for this summer season is `200 crore — 20% higher over last year’s budget.
Parle Agro has rolled out four campaigns to connect with consumers across multiple mediums including television, OTT, digital and outdoor. Its commercials are being aired during Indian Premier League broadcast on Star Sports channels as well as on Disney+Hotstar, besides during world television premieres of some movies.
Bollywood celebrities are the clear favourite when it comes to endorsing beverage brands. Shah Rukh Khan is endorsing Thums Up from the Coca-Cola stable for its Toofan campaign, while rival PepsiCo has on-boarded Salman Khan, Hrithik Roshan and Mahesh Babu. Parle Agro is banking on the star power of Priyanka Chopra, Alia Bhatt and others, for its many brands.
Rajat Wahi, partner, Deloitte, suggests brands expand rural footprints through tie-ups such as the government’s CSC Grameen e-stores and tailor communication to consumers in these markets. He also notes that people have, during the pandemic, moved to healthier alternatives, such as coconut water, lemonades, immunity booster drinks, fresh juices, etc., which will impact the business of cold drinks to an extent.