PepsiCo has dropped price of its flagship product in bid to take on rival Coca-Cola
Beverage major PepsiCo has dropped the price of its 200 ml Pepsi returnable glass bottles by Rs 4, bringing it on par with rival Coca-Cola, which is available for Rs 8 for the same pack size in the marketplace.
Coming just before the October-November festive season, the 33% drop in price is expected to help PepsiCo garner incremental sales at a time when rival Coca-Cola has been aggressively pushing both distribution and reach of its products.
A mail sent to PepsiCo regarding its price drop remained unanswered till the time of going to press.
While Pepsi is ahead of Coke in the soft-drink pecking order with a market share of 9.8% (Coke has a 8.5% share), according to industry estimates, Coca-Cola still tops the list with its Thums Up and Sprite at 15% and 14.8% shares respectively.
Coca-Cola had dropped the price of its 200 ml returnable glass bottle early last year from Rs 10 to Rs 8 and has since maintained the price line despite persistent inflation.
The move had also made the 200 ml bottle of Coke the cheapest among its other carbonated beverages, triggering a furious debate that the price drop would cannibalise sales of Thums Up, which comes for Rs 10 for the same pack size.
PepsiCo had opted not to respond to this price war back then since a price reduction would have impacted margins, which are thin in the RGB segment. Almost 20 to 30% of industry sales are estimated to come from returnable glass bottles.
Bottles are also aggressively pushed in general trade, targeting consumption-on-the -go as opposed to larger PET packs, which are pushed in modern trade.
The drop in price of Pepsi also comes at a time when the company has elevated veteran Sanjeev Chadha as its chief executive officer for the Asia, Middle East and Africa (AMEA) region.
Chadha, who has been with PepsiCo for 23 years, is known to be bold and aggressive with his decisions and is expected to help the company regain lost ground in India, a key market within AMEA, which is the largest and most profitable regions for the world's second-largest beverage maker.
Chadha, who is in charge of 90 markets as AMEA CEO, reports directly to Indra Nooyi, chairman & CEO, PepsiCo.
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