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Coca-Cola takes on 'B brands'

News, 11 July 2017
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NEW DELHI: Coca-Cola, the soft drinks giant, is rolling out a new brand at a significantly lower price point as it seeks to wrest share back from small, regional brands and address price rises that have resulted from the implementation of the goods and services tax (GST).

"Coca-Cola has developed a new value-based proposition for price-conscious consumers in aerated beverages," a spokesperson told the Economic Times.

This is an extension of its packaged drinking water brand Kinley: the Kinley Flavors range of aerated drinks, available in flavours such as lemon, jeera and orange, is expected to be up to 40% cheaper than the company's flagship brands, Coca-Cola, Sprint and Fanta.

"These new launches will be available in 250ml PET packs at attractive price points," the spokesman said, adding: "We are doing pilots in select markets and will expand over time".

Soft drinks prices will also rise as a consequence of the GST, with aerated beverages being taxed at an effective rate of 40%. While drinks companies cannot absorb all of this rise themselves, they do see an upside.

"In spite of higher GST rates for the aerated beverages, certainty in tax regime provides us with an opportunity to meaningfully expand our portfolio, catering to all consumer segments," Coca-Cola's spokesperson said.

Earlier this year both Coca-Cola and Pepsi were reported to have set up separate groups within their organisations to monitor India's regional soft drinks brands that command a significant share – the so-called B brands, of which there are now more than 200, according to the Economic Times.

These have successfully been gaining share, with industry estimates ranging from 12% to 17%, thanks in part to their lower price and ability to appeal to specific regional preferences.

"Localisation and regionalisation will trump globalisation, especially when it comes to taste," declared brand and marketing consultant Harish Bijoor. "It has been happening and now it is accelerating."

Pepsi's take on regionalisation has involved labelling cans and bottles in local languages as a way to connect with consumers.

Data sourced from Economic Times; additional content by WARC staff

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