Coke rewrites script to be a brand for all seasons | The Financial Express

Coke rewrites script to be a brand for all seasons

Coca-Cola India is reallocating its marketing spends to multiple quarters, against the strong orientation towards the first and second quarters.

Coke rewrites script to be a brand for all seasons

The core brand theme, Thanda Matlab Coca-Cola, is still going strong, but the US beverage giant is trying hard to establish itself as a brand for all seasons. At the heart of the brand strategy is how to get more from the core. So while the peak summer months will continue to be important, de-seasonalisation of all its core brands, including Coke, Maaza and Sprite, will be the focus in the coming years.

A multi-pronged approach is playing out to make the strategy workable. Coca-Cola India is reallocating its marketing spends to multiple quarters, against the strong orientation towards the first and second quarters. In 2022, Coca-Cola India decided to hike advertising and marketing spends in the third quarter of the calendar year to ensure strong demand in the festive season.

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At the same time, the soft drinks major is also leveraging its popular brands. The company over the last one year, has introduced variants like Maaza Aam Panna, Fanta Apple Delite, Limca Sportz, honey infused juices under its fruit nutrition brand Minute Maid, and Charged—which is an energy drink, riding on Thums Up.

According to Sanket Ray, president of India and Southwest Asia for The Coca-Cola Company, the idea is to increase the occasions when the brands are consumed and offer more variants.

With these initiatives, Coca-Cola is building a culture of experimentation and trying out new ideas to make the sales in the second half of the year equal to the first. “There is a 1% swing that has happened. My guess is that if we do 1% every year and in the next 4-5 years, then that would become substantial. A 1% swing is big if you look at the scale of operation that we are doing now. Best case scenario that I am expecting is 2%, so a 58:42 may become 56:44 and then we move slowly through it to make it equal. Still it is not going to be easy to change habits so quickly,” Ray said.

Explaining the rationale behind the strategy, Ray said that the goals of de-seasonalisation is two-fold —to get more customers and make it a habit, as well as better utilisation of assets. “We are not building capacities only for summers, so (if we have all year round consumption), the costs come down, as you have more and more of asset utilisation,” he said.

Also Read: India had a knock-out quarter: Coca-Cola CEO

Coca-Cola is looking to drive home consumption further, focus on newer beverage categories such as glucose drinks and mass energy segments, to recruit new consumers as priority strategies. For instance, taking its homegrown brand Limca, Coca-Cola launched Limca Sportz in August, which is a glucose plus electrolyte-based beverage without fizz, and with essential minerals for rapid fluid intake and rehydration, catered towards individuals involved in physical activity in the form of sports, exercise, and high intense chores. Similarly, with its energy drink Charged, the company is tapping into the growing energy drinks market in India, which, according to some estimates, is slated to touch a minimum of Rs 10,000 crore by 2027.

Additionally, Coca-Cola is engaging in different kind of messaging for its iconic brands. Sprite, which is largely preferred for consumption during summers, for instance, is now being positioned by the company as a drink which cuts not just the summer heat, but also heat in the mind, and so is an all-year round drink.

According to brand and marketing experts, while de-seasonalising the business portfolio is the way forward, and if done well can lead to 30-40% growth in the business, it would be an uphill task in India. “Some of the coldest countries in the world have the highest per capita consumption of Coke. But in India, traditionally we associate certain beverages with the summer season and some with the winter season, along with all kinds of cultural and health connotations attached to them. So, as a strategy one cannot fault it, but carbonated drinks I suspect will be more seasonal in India,” Samit Sinha, founder and managing partner, Alchemist Brand Consulting told FE.

Also, Coca-Cola has its direct rival PepsiCo, which boasts of a much more diversified portfolio with food products like Uncle Chips, Lays, Doritos and Kurkure, which are season agnostic. However, Sinha called it a “temporary advantage” for Pepsi. “Coke with all the resources, its distribution muscle, strength of the brand, and with the momentum it has, can get into all those businesses. So that is why this is temporary,” he said.

The beverage major has already been strategically focusing on ramping up distribution in general trade channel with a strong focus on rural markets, and is focusing on festival demand to further drive de-seasonalisation.

Sundeep Bajoria, vice president, (India Franchise), The Coca-Cola Company said, that as the summer months wind up, the period of festivities and celebrations kicks in, which lasts till December. “We want to make sure that we are integrated into the consumption and festival fabric of India. We have been consciously working on building the second season around the festivals,” he said.

With consumers’ preference for healthier options growing, Coca-Cola launched honey infused range of juices under Minute Maid, beginning with Punjab in October, and has plans to roll out in the other regions of north India in 2023. With plans to grow its nutrition category, the launch is in line with Coca-Cola’s ‘Beverages for Life’ strategy.

These steps, experts said are a natural progression, as companies will have to reduce dependency on carbonated beverages because of the unhealthy connotations attached to it, and will aid in de-seasonalising as well.

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First published on: 27-01-2023 at 06:00 IST