By Alokananda Chakraborty
Days after announcing its ambitions to foray into the FMCG space, Reliance Industries has reportedly acquired homegrown soft drink brand Campa-Cola for Rs 22 crore from Delhi-based Pure Drinks Group. The energy-to-telecom behemoth is planning to launch the soft drink in a new avatar in October this year.
Launched in 1970s, Campa-Cola came into its own only after Coca-Cola, along with some other American brands, chose to leave India than to operate under the provisions of the Foreign Exchange Regulation Act introduced by the Morarji Desai government in 1977. The brand’s catchline, ‘The Great Indian taste’, was a big hit at that time as it appealed to the nationalist sentiment.
Coca-Cola, which was launched and distributed in India since 1949 by the same Pure Drinks Group before exiting the country, re-entered the Indian market in 1990s alongwith PepsiCo. As local brands began to feel the squeeze, some sold out while others simply lost the fizz. Over time, Campa-Cola also threw in the towel.
Social media was abuzz since the reports of the buy-out broke on Wednesday, riding on nostalgia factor, which many commented could help to bring Campa-Cola back into reckoning.
“But nostalgia alone might not be enough,” says Mohit Hira, co-founder, Myriad Communications, & venture partner, YourNest Capital Advisors. “Campa-Cola was not a hit like Gold Spot, it didn’t have the same buzz in the first place. Also it will ring a bell only among a certain generation but not with many youngsters. And with colas, appealing to the youth is a given.”
In other words, the brand has to find a differentiator or ‘a new story to tell’ in a highly competitive category.
According to the report by economic policy think tank ICRIER, the size of the the country’s non-alcoholic beverage market was estimated at Rs 67,100 crore in 2019, and is projected to reach around Rs 1.47 trillion in 2030.
Reliance’s FMCG strategy was visible when Isha Ambani, director, Reliance Retail, addressed shareholders at RIL’s 45th annual general meeting on Monday. “The objective of this (FMCG) business is to develop and deliver products that solve every Indian’s daily needs, with high quality products at affordable pricing,” she had said.
RIL could have launched an entirely new brand, but launching an entirely new brand and building equity is a long-drawn and expensive affair, say experts. Reviving even a fading brand can be done at a third of that cost, they added.
“An old brand with residual goodwill would be instantaneously recognisable by some sections and may have an advantage over a completely new brand that people know nothing about,” says Ranjan Negi, partner, Mettle legal. “Its revival against billion dollar valued brands in a saturated market may not be as expensive.”
Bringing back a well-known brand will save crores in upfront marketing and name recognition will draw attention in a crowded marketplace.
What is bound to help Campa-Cola is Reliance’s distribution might and its category killer pricing strategy, which was on full display when it entered the telecom arena.
As on March 31, 2022, Reliance Retail operates 15,196 stores across 7,000-plus cities with a retail area of over 41.6 million sq ft. JioMart’s likely presence on WhatsApp will be an added advantage.
“If you walked into any Reliance Fresh store you will find many private labels, that are often cheaper than equivalent national brands but offer great quality.
Take its noodles brand which has packaging that is very similar to Maggi, but is priced a notch below the Nestle brand. One can safely assume that in this case (Campa-Cola relaunch) too Reliance will play the price card,” said an analyst, who didn’t wish to be identified, on the group’s pricing strategy going ahead.