In the first major challenge to Reliance Chairman Mukesh Ambani’s plan to capture India’s beverage market with his revitalized Campa Cola brand, soft-drink giants Coca-Cola and Pepsi have devised a new strategy by focusing on sugar-free beverages. Both Coca-Cola and Pepsi have launched diet and light variants of their beverages in smaller packs, priced at Rs 10, which usually sells more than larger packs.
The companies have rolled out Rs 10 bottles of their popular sugar-free beverages, including Thums Up X Force, Coke Zero, Sprite Zero and Pepsi No-Sugar.
According to market insiders, this is the first time that either Pepsi or Coca-Cola has introduced such low-priced packs of their sugar-free drinks. The move is aimed to avoid reducing the prices of their larger packs, and counter the effects of the price war triggered by Mukesh Ambani-owned Campa Cola, they said.
“Multinational beverage companies are waiting and watching how the expansion of Campa (Cola) turns out. After this, they will they decide whether to reduce the prices of their main brands across the country,” a report by ET quoted an industry insider as saying.
According to Sanjeev Agarwal, chairman of MMG Group — which owns Moon Beverages, one of the largest franchise bottlers of Coca-Cola– consumers preference for beverages will less or zero sugar has significantly increased in recent years.
“Keeping in mind the taste preferences of consumers, we have expanded our diet and light portfolio from Diet Coke to Coke Zero, Sprite Zero and Thumbs X Force. The prices start at Rs 10, Rs 20 and Rs 30 for 250 ml and 500 ml packs,” the ET reported quoted Agarwal as saying.
Notably, PepsiCo has rolled out 200 ml bottles of sugar-free Pepsi for Rs 10, starting with large markets like Andhra Pradesh. An official said the roll out is aimed at competing with Mukesh Ambani-backed Campa Cola and B-Brands in Andhra Pradesh, which is one of the largest soft beverage markets in India, and combined with Telangana, accounts for a nearly a fifth of total sales of carbonated beverages in the country.
Meanwhile, Mukesh Ambani-led Campa Cola is also planning to roll out 200 ml packs at Rs 10 via offline as well as quick commerce channels across the country.
As per industry insiders, the Rs 10 packs are not profitable for beverage companies, but the loss is offset by not having to reduce the prices of their larger packs. “Companies are maintaining the current prices of their larger packs and running consumer promotions and bundling offers on special occasions on general trade and quick-commerce platforms,” said an insider.
Billionaire Mukesh Ambani– the richest man in Asia– has set his sights on conquering India’s soft-drink market with his Campa Cola brand of beverages, and using the same tactic he used with Reliance Jio to capture the telecom sector, triggering a price war in the space and forcing market leaders, Coca-Cola and PepsiCo to follow suit or risk losing market share.
