Coca-Cola, Pepsi focus on new drinks as cola sales suffer

Coca-Cola adds newer flavours and invests in non-aerated drinks

Beverage makers Coca-Cola and PepsiCo are increasingly focusing on non-cola drinks as a sale of their core products come under pressure. 

Coca-Cola, the largest beverage maker in the country by revenue, is adding newer flavours and investing in non-aerated drinks. Rival PepsiCo is trying to cut down on a use of sugar, apart from deviating from cola-based drinks.

Coca-Cola India has added a number of new flavours in its portfolio during the last few months. Two of its three major initiatives, launching Fanta Green Mango and Vio and increasing the focus on Maaza, are in non-aerated drinks. 

Vio is a milk-based flavoured drink launched during the summer. The company aims to increase Maaza sales by investing in backend operations. Fanta Green Mango, an aerated drink, is the company’s venture in juice-based beverages.

The moves come at a time when Coca-Cola’s sales are stagnant in India. Coca-Cola’s sales volume went up three per cent during the crucial April-June quarter and contracted four per cent during July-September.

PepsiCo, which has launched its first sugarless drink under the 7UP brand, plans to add more products. It launched 7UP Revive, a hydrating drink, this year. Sales of another non-cola drink, Nimbooz, have grown higher than those of colas despite being in the fizzy category.

“There is a gradual shift away from cola drinks in the country. Growth in non-cola drinks is driving players to focus on such products. The beverages industry as a whole has the potential to grow further, evident from the successful initial public offering of Varun Beverages,” said Prashant Mehra, lead, retail and consumer sector, Grant Thornton India.

“Slowdown in the quick service restaurant business has affected beverage sales. The increasing availability of substitutes like fruit-based juices and new entrants have impacted sales,” said an industry analyst. 

Companies like Jayanti Beverages, RC Cola India, Xalta and Bisleri International have flooded the market with cheaper aerated drinks. A 250-ml bottle of fizzy drinks from these manufacturers typically sells for Rs 10-12. PepsiCo and Coca-Cola, in turn, have come out with smaller packs.