Cola Wars

11 Jul 1991

cola-pepsiThe Dual between Thumps Up-Pepsi has been, by far, the most fierce confrontation in the Indian market place. Some of the interesting yet lesser-known glimpses of the battle for the bottle:

Tata-Birla join hands
Amazing isn’t it; but it is true; the two legendary industrial houses have created a history of sorts by coming together probably for the first time in a business venture. The credit for this goes to Pepsi. The promoters of Lehar (Pepsi, Seven Up, Mirinda) in India are Pepsi Foods. One of three shareholders in Pepsi Foods is Voltas Ltd., a Tata Concern (the other two being Punjab Agro Products and Pepsico Ltd). The bottling franchise of these drinks in eastern India has been bagged by VXL Ltd., a Birla firm.

The costliest T.V. commercial
After four years of unstinted effort, when Pepsi finally received the green singal, it was expected that they would announce their arrival with a bang. And what a bang it was!

According to agency sources, the electrifying dizzy paced spot featuring pop star Remo Fernandes and cinestar Juhi Chawla cost a whooping RS 50/- lakh to produce, telecast time charges extra.

Last year, on Independence Day, Lehar Pepsi was launched on the television with a 90-second commercial `Let the magic begin. ‘ Even before the actual telecast of this ad, teaser spots had been flashing for over a fortnight on the tube. Telecast in the premium `Super A’ slot before the `Chitrahaar’, the ad was concieved and directed by the Celebrated Vidhu Vinod Copra of `Parinda’ fame. According to agency sources, the electrifying dizzy paced spot featuring pop star Remo Fernandes and cinestar Juhi Chawla cost a whooping RS 50/- lakh to produce, telecast time charges extra. Undoubtedly the costliest commercial on TV in India but nothing compared to the Michael Jackson spot promoting Pepsi in American and advertising contract of just 5 million US dollars.

Who’s promoting what?
Among the backers of the hiprofile chairman of Parle Export (manufacture of Thums Up, Limca, Gold Spot, Citra, Rim Jhim) Ramesh Chauhan are politicians Suresh Kalmadi and George Fernandes.. On the other hand, chairman Ramesh Vangal of Pepsi Foods is in the good books of Jagdish Tytler, the erestwhile minister of food processing’ in the Rajiv cabinet.

Whereas Pepsi has featured Remo, Juhi and Modonna in its promotions, Thums Up has banked on the appeal of Pooja Bhatt and Salman Khan. The `Choice of a new generation’, commercial of Pepsi has been produced by H.T.A. while `Taste the thunder’ campaign is the brainchild of Ambience. And yes! one celebrity heart throb has been caught promoting both- Kapil Dev!

How big is the market?
As per various estimates, the `aerated’ soft drinks market in India is somewhere around 80 million crates per annum. Though seemingly impressive in isolation, the figure is pittance comparing the annual consumption in India and USA- 3 bottles per capita to 300 bottles per capita respectively.

According to a survey conducted by IMRB the total share of aerated, beverages in the soft drinks market is 66%. The remaining 34% is cornered by tetra pack drinks and other local products.

In the aerated beverages segment, 24% share is held by Cola drinks, 19% by plain soda, 17% by mango based flavours, 9% by orange based, 20% by lime-based and the remaining 11% by others. Though these percentages are estimated on a nation-wide basis, regional preferences vary sharply. For instance, cola based drinks are preferred in Delhi, Calcutta and Ahmedabad, whereas lime based beverages are preferred in Bombay and Kanpur.

The market shares
Before the entry of Pepsi, with live national (thums Up, Gold Spot, Limca, Citra, Maaza) and two regional (Rim Jhim, Kismet) brands, Parle Exports and their sister concerns were numero-uno with over 60% of the market captured. A distant second is Campa Cola of Pure Drinks, which is more popular in northern India.

Even more than the aerated beverages, in the tetra pack market, there is a virtual monopoly of Parle beverages with over 90% of the market share safely under their belt with Frooti and Appy.

B.V.O.
For the soft drinks manufactures of the country, these three letters B.V.O. (Brominated vegetable Oil) had almost become a nightmare threatening all peace and prosperity. It is the substance which produces the `Cloudy’ effect in citrus based drinks. In 1988, on the basis of some obnoxious research, the Govt concluded that BVO can cause cancer, hence it ought to be banned. The entire industry was caught dumb founded, and plead to the powers- that – be for two years period to look for alternates to this substance. Incidentally, in the United States, where the beverages market is much larger and the food-drug authorities are much more vigilant and cautious, BVO is being used and no diseases have been reported .The only people to have gained from this controversy seem to be the tetra-pack drink manufacturers.

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