Summers have always been the favourite battleground for cola majors Coke and Pepsi. This year is no exception, as the two slug it out for a bigger sip of the Indian beverage market.
Coca-Cola, this year, launched new products under the Schweppes Soda and Schweppes Tonic Water brands, besides piloting a new mango flavour under its Minute Maid 100 Per Cent juice portfolio. Company officials say, with a variety of products, it is looking to provide a wider choice to consumers.
PepsiCo has Mirinda’s double flavours — Orange-Mango and Orange-Masala — to woo consumers. Deepika Warrier, executive director (marketing), PepsiCo Beverages, says the company is laying special emphasis on innovation to drive consumption. “With innovation in communication, engagement, packaging and, at times, the product itself, we stay relevant for our consumers,” she says.
However, experts say, with consumers increasingly getting discerning in their taste, the need to innovate and provide healthy solutions is growing. This is visible in the growth rates that juice drinks have seen vis-à-vis carbonated beverages. While the ready-to-drink juice-based market, at Rs 2,500 crore, is just about one-fourth the size of the Rs 10,000-11,000-crore carbonated beverage market, the growth in this segment is nearly double the latter, at 25-30 per cent a year. Carbonated beverages have been growing at 15-20 per cent a year.
Focus on health
Beverage majors Cadbury-Kraft, Rasna and NourishCo (a 50:50 joint venture between PepsiCo and Tata Global Beverages) have already embarked on the ‘health’ route with “fortified products”.
On the health & wellness platform, Rasna has relaunched its powdered beverage drinks, Fruit Fun and Fruit Plus. Its chairman & managing director, Piruz Khambatta, admits the need to provide both taste and strength was imperative, at a time when consumers are looking for these attributes in their beverage products. “Trends increasingly show that consumers want more than just great-tasting products,” he says. “We kept that in mind as we relaunched the product, with a focus on providing energy besides taste.”
This was also the rationale behind NourishCo’s new launch, Tata Water Plus (water fortified with minerals) as well as Cadbury-Kraft’s new Tang Mango. The latter is a thick mango-flavoured drink with vitamins and nutrients. Kraft officials say they were looking to provide the right balance between taste and goodness. The coming seasons will see the company shifting its attention to local flavours. “We are working on a bank of local flavours that appeal to local tastes,” Narayan Sundararaman, director (powdered beverages, gum & candy), Kraft Foods, said.
Summer is key
Despite vagaries of the weather, the four-month period from March to June, contributing 30-40 per cent to sales, remains a crucial period for beverage companies. Most companies are aware that their best foot has to be put forward during this period. In 2011, for instance, most beverage companies saw their sales declining 10-15 per cent between March and June, thanks to a cool summer. While 2012 has so far been mixed, with the north seeing a rain spell last week, companies remain optimistic.
PepsiCo’s Warrier says: “There is a massive under-served demand for packaged beverages in India. To address this, we have created a go-to-market strategy based on three filters — portfolio class, town class and outlet class. On these lines, we now have five go-to-market channels – premium, core, value, modern trade and rural — independent of each other and carrying products catering to different sections of consumers.”
Warrier declines to get into specifics about PepsiCo’s distribution reach, but says her firm has done a combination of things like expanding sales force, increasing distribution of coolers, strengthening back-end operations, etc. Rival Coca-Cola has also put in place an aggressive distribution strategy, aimed at both urban and rural areas.
Home-grown Parle Agro, maker of brands like Frooti and Appy has opted to raise its distribution by 20-25 per cent a year. Its joint MD and CMO, Nadia Chauhan, says: “Apart from regular retail stores, our endeavour has been to target seasonal outlets that come up specifically during the summer. Consumption at these places is high.”