Warc Blog

Soft drinks brands face test in India

8 July 2013
BANGALORE: International soft drinks brands such as Pepsi and Red Bull are facing challenges in India, from both the weather and the growth of innovative domestic brands.

The recent early and heavy rains that have flooded parts of the country have affected soft drink sales in June, a critical month for the industry.

Growth has slowed and retailers report Coca-Cola and Pepsi have stepped up their consumer promotions and trade discounts in order to push sales.

But a PepsiCo spokesman told the Economic Times that instead of focusing on one month, the five-month period from April to August should be seen as the important period.

"If monsoon arrives early in some years, say in June, the industry usually witnesses better than average August sales, as monsoon also recedes early in those years," he said.

Separately, the Economic Times also noted that a growing number of domestic food and beverage businesses were challenging the major players.

"We were never apprehensive about taking on a large, established brand," said Neeraj Kakkar, co-founder and chief executive of Hector Beverages, which produces an energy drink, Tzinga, that competes with Red Bull and sells 1.5m packs a month.

Hector was established in 2009 and its Tzinga brand has differentiated itself through product innovation, offering multiple flavours compared to Red Bull's one, while its novel packaging is cheaper than a can.

Hector now intends to branch out with an Indian drink brand, Paper Boat, which is available in traditional flavours like aam ras and jal jeera.

"Consumers always want to try new products and we knew we would have a winner if we created the product the consumer wants," said Kakkar.

The head of advisory firm Technopark noted that India has always had strong local brands.

"It is only in the past 15 years that the media and consumer mindset has been dominated by the global brands," observed chairman Arvind Singhal.

Data sourced from Economic Times; additional content by Warc staff

 
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