Coca-Cola To Go Slow On Flat Diet Coke

Diet Coke, Coca-Cola's sugar-free cola brand for health freaks, is running out of fizz in India. Though the elite urban populace has embraced the brand, in rest of the country Diet Coke has received a lukewarm response proving yet again that what may succeed internationally may not work in India at all.

As a result, the local management of the US multinational has now decided to change tack and go slow on the brand.

"The concept of health cola has yet to catch up in India," said a top Coca-Cola India executive.

"Diet Coke stands low priority in our portfolio of brands now. Also, it is not economically viable to aggressively push the product since it caters to a niche (health conscious) segment of the market and it generates low volumes to the total turnover," he said.

Launched in mid-1999 with great fanfare, the company agrees that even after two years of the launch, the diet-cola market in India has not even touched 1 per cent of the carbonated beverage market. "Its share would be just about 0.7 per cent," the executive said.

"The other disadvantage is the product has a low shelf life, it does not last beyond a month. Hence any inventory pile-up results in wastage," the executive said.

Earlier, the company was aggressively pushing the brand in 23 cities but is now concentrating just in the four metros, and a few other large cities. The company claims that it has a market share of 65 per cent in the diet cola market in India.

Coca-Cola India expects to break even this year after an 8-year stint in the country and has targeted a turnover of Rs 4,000 crore this year. The US multinational returned to India in October 1993, after a gap of 16 years.

The company has invested over Rs 4,000 crore in the country since its return and had said earlier that regionalisation of operations, comprehensive marketing strategies and a one-time absorption (write down) of losses worth $400 million last year were the main reasons for expecting a break even this year.

Coca-Cola has increased unit case volume by 14 per cent in 2000 over that of the previous year and cornered 58.4 per cent market share in sales in the same period.