Reliance, India’s leading retailer, will supply Campa to its 2,500 grocery stores. (Document)
New Delhi:
Industrial giant Reliance is revitalizing a historic local cola brand with a plan to use its vast retail network, discount prices and harness nationalism to challenge the water giants. America’s soft drinks are PepsiCo and Coca-Cola in a key market.
Controlled by billionaire Mukesh Ambani, Reliance this month launched its innovative Campa drink, a sugary soft drink that was popular in India in the 1970s and 1980s before disappearing from store shelves as giants America’s giant expanded rapidly in a liberalized economy.
At first glance, it looks like Ambani will have a hard time loosening Pepsi and Coca-Cola’s grip on a market that Euromonitor estimates is worth $4.6 billion and will grow 5% annually through 2020. 2027. Other famous tycoons have tried to follow suit. confronted the beverage giants, and failed, most notably Richard Branson with his Virgin Cola.
But Asia’s richest man famously disrupted India’s telecom market seven years ago at exorbitant prices to make Reliance a leader in that industry. And he’s applying some of the same strategies in his soft drink venture.
Amulya Pandit, consultant at Euromonitor International, said: “Coca-Cola and Pepsi are not used to a national challenge, and Reliance has the financial strength and reach to challenge them with a valuable local brand. high nostalgia”.
A person with direct knowledge of Reliance’s plans said it aims to open some of its own factories or joint ventures to make Campa, while also bringing soda to hotels, restaurants and selling it on stores. flight. Campa production is now outsourced, following a $2.7 million acquisition of the brand last year.
The company is offering massive discounts at the store. A 2-liter bottle of Campa Cola costs 49 rupees (60 US cents) in stores, nearly 50% off the price on the label and about a third less than the 2.25-liter Coke and Pepsi variants. , a Reuters examination showed. The smallest bottles of Campa Cola and Coke both cost 10 rupees, while Pepsi starts at 12 rupees.
The person said: “The price will be shocking,” the person said, adding that Reliance is planning a big promotion in the upcoming popular IPL cricket tournament and is in talks with at least three teams. to make Campa their refreshment partner.
People who don’t want to be identified as the strategy are secretive. Reliance did not respond to a request for comment, while Pepsi said it does not comment on competition as a policy.
Coca-Cola said it has kept the price of small bottles unchanged since last year and is focused on expanding distribution. “There are new players in the market that offer great opportunities for investments to grow the market further,” it said.
Reliance, India’s leading retailer, will supply Campa to 2,500 grocers and thousands of smaller out-of-network stores as part of its push to promote new consumer goods from which it has targeted. internal target of $6.5 billion in annual sales for 5 years.
The company also has a grocery shopping app and a wholesale vertical under which it supplies consumables to 500,000 retail stores, where it will also tap Campa sales.
‘EXCELLENT INDIAN FLAVOR’ VS FOREIGN BRANDS
Reliance’s foray into consumer goods and soft drinks is being driven by T. Krishnakumar, an executive who has worked for nearly 17 years at Coca-Cola in various leadership roles.
Pepsi and Coca-Cola will also carefully monitor Reliance’s marketing strategy after it targets nationalist sentiment and nostalgia by promoting Campa as a homegrown brand with “Taste of India”. wonderful” and a “rich heritage”.
A former Pepsi executive, who did not wish to be identified because of the sensitive nature of the topic, said the US company has always been worried about local products being marketed with the “Indian” agenda. above all”, especially at a time when Prime Minister Narendra Modi himself advocates. self-reliance.
Competition has taken place in the market.
At five Reliance stores that Reuters visited in Mumbai in western India, Chennai in the south and Lucknow in the north, plastic bottles of Campa cola or lemons were displayed at the main entrance or on shelves next to competitors. compete.
At a store in Chennai, a Reliance store manager said this year they placed Campa at the entrance to advertise it, with competitors hidden behind it and invisible at first glance. Another store employee in the city said that for every 100 bottles of Pepsi and Coca-Cola, 30 bottles of Campa were sold.
At the moment, America’s rivals have the upper hand. Alok Shah, consumer analyst at Ambit Capital of India, said Pepsi and Coca-Cola beverages are available in at least 3 million stores in India and the companies have extensive logistics networks. , dozens of plants and the advantage of taste is preferred by many people.
“We will need to wait and see if consumers switch to Campa,” he said, adding that Pepsi and Coke remain the foreign brands coveted by many Indians, provided with Small package prices are similar.
Srinivas Rao said he still loves Coca-Cola’s Thums Up, a domestic brand it acquired in 1993 and is the best-selling brand in India, unlike in the US, where Coke dominates.
“We buy Thums Up every time we eat biryani or meat at home,” Rao said outside a Reliance store in Chennai. “We weren’t attracted to discounts from other brands, including Campa.”
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
