After a dry spell, cola firms bet on festive fizz

As low summer sales left them high and dry, Coca-Cola and PepsiCo chalk out new strategies

Beverage companies such as Coca-Cola and PepsiCo have made elaborate plans to tap into the festive demand, after the crucial April-June period, when cola demand usually balloons, left them high and dry.

The largest beverage company in the country, Coca-Cola India, reported only a three-per cent volume growth in the April-June period this year despite the summer being long and hot.

PepsiCo India's volume growth was not disclosed by the parent company during its second-quarter results this year. The US major, however, did say at an overall level, Asia, Middle East and North Africa (AMENA), which includes India, saw a five-per cent organic volume growth in beverages for the second quarter.

Foods, on the other hand, saw four-per cent organic volume growth in the AMENA region for the quarter under review.

While these numbers were highest for PepsiCo across its various global regions in the June quarter, analysts said there was no denying the pressure on cola companies as consumers increasingly moved away from fizzy drinks.

"Two successive droughts have slowed down rural demand, which has had a cascading impact on sales in smaller and larger markets. We are fairly optimistic now of the festive season showing a pick-up in sales, following a good monsoon as well as salary hikes because of the implementation of the Seventh Pay Commission recommendations and One-Rank One-Pension [for retired armymen]," said Venkatesh Kini, president, Coca-Cola India and South West Asia.

Apart from pushing Coke aggressively as a drink that can be consumed on any occasion, Coca-Cola is also launching a range of gifts packs of its various brands under the Utsav umbrella. These are priced between Rs 100 and Rs 500. The company is also widening the range of its juice portfolio under Minute Maid to tap into the health-conscious consumer.

PepsiCo India, on the other hand, is pushing its Tropicana festive packs by offering a wide variety of price and product options this year through traditional, modern trade and e-commerce, company officials said.

The firm is also launching a 1l pack of Tropicana Slice Alphonso, the indigenously produced mango drink, this festive season in response to consumer demand.

Company officials said it would be available at a special price of Rs 99 to drive sales during the festive period.

Additionally, PepsiCo India is also launching new flavours under Quaker Oats, presenting special gift packs under Kurkure and pushing Lay's aggressively. The aim, said company officials, was to make the best of this period, when consumers are in a mood to spend.

HIGH HOPES

• Weak summer sales have prompted beverage majors such as Coca-Cola and PepsiCo to push the envelope this festive period
   
• Coca-Cola India saw only a three per cent volume growth in the April-June quarter
   
• Companies say two successive droughts have resulted in impact on sales during summer
  

 

Festive season is expected to be better as consumption kicks in due to good monsoon and salary hikes