A Jio moment in cola war? Reliance ups the ante with iconic brand Campa

Brand to be launched across the country, beginning with Andhra Pradesh and Telangana

Can Reliance play the price warrior combined with leveraging its own retail distribution to take on the might of global beverage giants Coke and Pepsi?

On Thursday, Reliance Consumer Products Ltd (RCPL) which had bought retro brand Campa Cola from Delhi-based Pure Drinks for Rs 22 crore a few months ago, announced the launch of the brand across the country beginning with Andhra Pradesh and Telangana.

Brands that have passed into history are rarely revived but Reliance is re-launching Campa Cola which used to be popular in the 1970s, especially in north India.  

Initially, when Coke exited India, Campa Cola thrived. When both Coke and Pepsi roared back, it was a David to the two Goliaths in putting up a good fight but eventually it went down. Reliance is clearly looking at disrupting the market by playing the pricing game at the entry level — it is offering Campa in three flavours cola, orange and lemon at a mere Rs 10 for 200 ml in a PET bottle.  

Said a senior executive of one of the beverage companies: “At this entry level price we believe they can never make money, We also have a 200 ml offering but in a returnable bottle at the same price, so consumers have a choice at a similar price.”

The executive said that the MNCs sell their cans at around Rs 32 for 250 ml and a pet with the same liquid at Rs 20 which is substantially higher than the Reliance offer.  

But MNC beverage companies are not worried because they see it merely as a customer acquisition strategy. They point out that Reliance’s focus is not to enter into a headlong battle with Coke and Pepsi and challenge their domination.

Instead, the re-launch is part of Reliance’s larger long-term strategy to build a stable of ‘private labels’ in FMCG brands.

Retail experts say they are doing this through acquisitions and acquiring stakes in brands such as beverage brand Sosyo and chocolate brand Lotus. Talks are on to buy Garden, a snack brand. Reliance is also developing its own inhouse private label brands such as Desi Kitchen and Good Life.      

Experts say the Reliance plan is two-fold. First, sell these brands through its own distribution outlets, for example, its 16,5000 retail stores, its online platform JioMart (which is in 250 cities) or through its cash and carry retail partners (Reliance recently bought Metro Cash & Carry). Second, reach out to the millions of kirana outlets and buy shelf space, rather like Coke or Unilever. 

In fact, it has already made inroads into over two million merchant outlets through JioMart who help the company in the last mile delivery and the number is expected to go up to 10 million in a few years.

That said, Coke and Pepsi are far ahead. They distribute their drinks through a cold chain of five million retail outlets with whom they have a long relationship and the best shelf space. To break into this dominance, even with a string of brands, will not be easy.

Also modern trade, where Reliance is a force to reckon with through its various formats, accounts for only 4 per cent of total carbonated drink sales while e-commerce is a mere 1 per cent. So even if Reliance cracks these markets, it will be a small share of the overall market because the big sales happen in the kirana shops.

Equally intriguing is whether Reliance can pull off reviving the magic of a nostalgic brand? “Reviving nostalgic brands looks like a good idea but it is an uphill task,” said advertising guru Sandeep Goyal. “The old constituency of customers are no longer active customers and the newer customers may or may not take to the brand at all.”    

But there are others, such as Arvind Singhal, chairman of Technopak, who believe the gamble with Campa Cola will work.

“The timing is perfect, just when the summer season is starting (the industry expects market volumes to grow by 12-13 per cent this year). Also, they have the best distribution system which they can leverage to aggressively promote the brand in their own stores,” said Singhal.  

Singhal says the process might take a few years but adds that Reliance has been building connections with both kirana shops and small retailers for some time.