Coca-Cola India tells trade partners to push Coke ahead of other drinks


12 Jan 2012
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Coca-Cola India tells trade partners to push Coke ahead of other drinks

Beverage maker Coca-Cola India has told its bottling and trade partners to push Coke ahead of other brands in its portfolio, two officials with knowledge of the development told ET.

The idea is to push volumes of the American brand that has traditionally lagged behind its own brand Thums Up.

"This is the first time the company has told its partners to specifically intensify focus on brand Coke, though targets are set routinely every year for all brands," one of the officials said.

Coca-Cola's move is part of the US firm's long-term plan-internally called 'vision 2020'-to promote brand Coke across markets.

"Our 2020 vision outlines our portfolio priorities as creating the world's most valuable portfolio of beverages and winning with trademark Coca-Cola," a Coca-Cola India spokesman said in response to ET's query.

"In India, as across the world, we have outlined our focus on growing the Coca-Cola franchise," he said.

In February, just ahead of the peak summer season, the beverage firm had dropped prices of Coke's 200 ml returnable glass bottles to Rs 8 in select markets to push volumes. All other fizzy drinks in its portfolio, including India's top-selling cola brand Thums Up, continue to be priced at Rs 10 for a 200 ml bottle.

"India, along with other key emerging markets, is under big pressure to deliver on brand Coke," a company official said. "The firm is going all out to push the brand," the person said.

The aerated drinks market in the country is estimated at Rs 11,000 crore, and Thums Up leads the category with a share of close to 15%, according to data by market researcher Nielsen.

A top beverage industry official clarified that the company's move to focus on Coke brand is to take on global rival Pepsi and not Thums Up. "We want Thums Up and Coca-Cola to be the top two cola brands in the country," the person said.

Currently Coca-Cola is in third place behind Pepsi. But PepsiCo had responded to the Coca-Cola price cut by dropping prices of 200-ml bottles of brand Pepsi to Rs 8 soon after Coke's move.

Coca-Cola has been taking a number of initiatives to grow Coke brand in India, which is now one of the company's top 10 markets in volume.

Last month, for the first time, Coca-Cola split its ad account between two of the country's best-known creative agencies-Prasoon Joshi-headed McCann Erickson and R Balki-led Lowe Lintas-to strengthen the brand in the country. It also brought Weiden + Kennedy on the brand Coke account.

While announcing the January-March quarter results last month, the Atlanta-based firm mentioned only brand Coke's volumes, which it said grew by 27% in India.

The company had announced that its sparkling beverages grew by 19% during the quarter in India, and that growth was led by brand Coca-Cola.

Both American cola brands Coke and rival Pepsi have been unable to shake off the dominance of homegrown beverage brand Thums Up.

Introduced in 1977 by Ramesh Chauhan, Thums Up was bought by Coca-Cola along with lime-flavoured lemon drink Limca, orange drink Gold Spot and mango-based Maaza in 1993 when the American giant re-entered India. Coca-Cola acquired Chauhan's beverage portfolio for $60 million (less than Rs 200 crore then).

Despite little marketing push post the buyout, Thums Up outperformed both Coke and Pepsi.

Subsequently, Coca-Cola started focusing on the brand.

Since then, Thums Up's positioning as a macho drink with a unique carbonation has remained constant. Coca-Cola, on the other hand, has been promoted through multiple marketing and advertising platforms.

Rival PepsiCo, meanwhile, has been facing flak globally for reducing focus on its flagship brand Pepsi to focus instead of 'healthy products'-a move that backfired and saw PepsiCo chief executive officer Indra Nooyi under tremendous pressure from stakeholders over a stagnant stock price and a beverage business lagging behind Coca-Cola.

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