Hindustan Unilever’s brand has finally become the volume leader in the two-player instant coffee market, albeit by a slender margin.
It’s time for celebration at Hindustan Unilever. Bru, its instant coffee brand, has finally overtaken its closest competitor, Nescafe, in terms of volume leadership. HUL’s sense of achievement is understandable as the competition in the Rs 800-crore instant coffee segment has been intense between the two players.
As per market research agency, Nielsen’s data sourced from the industry, Bru’s market share stood at 50.2 per cent year-to-date (January – October 2011) as compared to its competitor, at 49.2 per cent. While HUL does not comment on market share figures as a company policy, an email sent to Nestle did not elicit any response.
Is Bru’s being the new market leader and its move towards upping the game by bringing in new variants, brand ambassadors and even a coffee shop chain, all in a single year, a co-incidence? Arun Srinivasan, VP – beverages, HUL simply attributes the FMCG major’s renewed focus on Bru to the growth opportunities in the category being propelled by the emergence of a young, affluent and urban India.
Besides, the low-level of penetration of the drink also presents players with ample opportunity to explore the space. Compared to tea penetration at 96 per cent, coffee penetration is as low as 16 per cent. The brand's growth rate (year-to-date) of 25.6 per cent, ahead of the market (20 per cent year-on-year) only eggs them on.
And to continue on the growth path, Bru seems to have reverted to the oldest marketing mantra – straddling the pyramid. In simpler parlance, offering a product at each price point and as Srinivasan’s puts it “a flavour for every taste palette”. So at the start of the year, HUL launched Bru Lite, for those who like their coffee light. Mid-year, around July, came Bru Exotica, a premium range of coffees for the well-heeled, well-travelled Indians who like international flavours. Currently, the flavours being offered include those from Brazil, Colombia and Kilimanjaro. With Exotica, Bru has entered the premium instant coffee market, with prices starting at at Rs 180 for 50 grams (Brazil) and going up to Rs 300 (Colombia).
And the latest addition to the portfolio is Bru Gold, a non-chicory coffee, a 100 per cent coffee, for those who like their drink strong. With Bru Lite, Exotica range and Gold, HUL has beefed up its portfolio which previous included ice and hot cappucino and the original, Bru Green Label roast and ground further.
For brand consultant, Harish Bijoor of Harish Bijoor Consults, introduction of such variants by Bru is an attempt to add sub-segments to a relatively boring instant coffee segment that has been quite stagnant. However, he also expresses concern over Bru’s efforts leading to cannibalising of its own sales. “I don’t think consumers are aware of coffee types or are as evolved,” says Bijoor.
Promoting the brand
In this era of competition, no brand can afford to lag behind its competitors. So when Nescafe roped in Bollywood actors Deepika Padukone and Purab Kohli late last year, Bru’s move to bringing in its own brand ambassadors, Shahid Kapoor and Priyanka Chopra was a matter of time. And a perfect way it seems for “making the brand’s imagery premium and contemporary” as intended. The only problem, there is much common between the two brand’s intentions vis-a-vis their brand images – perceived young and glamorous like the beverage itself. All in all the brand ambassadors simply even out the field without any room for differentiation.
A similar logic is echoed by brand experts when commenting on the carefully designed communication for Bru’s new variants. The ads devised for them have been formulated keeping in mind the intrinsic qualities of the products. For instance, Bru Lite commercials use the theme of light moments shared by friends, whereas Bru Gold speaks of living life 100 per cent (interpreted as 100 per cent coffee as per tests carried out by the company). The Exotica ads on the other hand have been designed keeping in mind the individualistic coffee drinking experience and therefore use both the brand ambassadors separately. Such attention to detailing may be lost on consumers though who rarely pay attention to such nuances in advertising says Bijoor.
This year also saw HUL’s second foray into the services space. And after Kwality Wall’s ice cream parlours, Swirl came the Bru World Cafes. A space that its competitor Nestle has also dabbled in the past with Nescafe Coffee Parlours. While Nestle’s venture was discontinued, Bru views its own as “complementing their portfolio”. Currently, there are seven cafes operating under the chain in Mumbai and the company is in no particular hurry to expand. Industry experts are divided in their opinion on the foray. On one hand it can serve as a live station for advertising the brands and even as a point of sale or even a virtual lab for testing out any new blends in future. On the other, it won’t be a major value or volume generator, a reason largely attributed to Nestle shutting down its own coffee shops.
The big questions for the category now: how will these moves by Bru pay off? Will Bru be able to sustain its position as the volume leader? No one is hazarding a guess yet.