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Battle over Nimbu paani

BS Reporter 

Coca-Cola, the latest to add a dash of lemon to the cola war, is playing the pricing game to catch up with Pepsi’s Nimbooz and Parle’s LMN.

The cola war is passé; it’s time now for the battle over nimbu paani. A year after its arch rival Pepsi launched and made a huge success of Nimbooz, a lemon-based drink, Coca Cola has finally got into the act.

Coke’s Nimbu Fresh, launched last week under the Minute Maid brand, will be initially available in 35,000 outlets in Tamil Nadu and will be rolled out nationally later this year. The plan is to reach 90,000 outlets this year itself.

The lemon juice content in Minute Maid Nimbu Fresh brand is 5.7 per cent. For the moment, Coke will import the juice from Israel and the concentrate will be made at the company’s plant in Pune. It will then be sent to the company’s plants at Gangaikondan in Tamil Nadu and Chittoor in Andhra Pradesh.

Coca-Cola in India currently enjoys market leadership in the juice drink segment with brand Maaza and Minute Maid Pulpy Orange and the company hopes Nimbu Fresh will further extend its leadership in this fast growing segment.

Analysts, however, say Coke’s delay in entering the lime-based drink market is surprising (even Parle Agro has got a headstart with LMN — a name derived from the SMS version of the name Lemon) as lemon is the most popular flavour with a share of 49 per cent of the total juice-based drink market. Of the total packaged juice market of 90 million cases (one case is around 5.6 litres of beverage), juice-based drinks account for about 90 per cent.

However, Ricardo Fort, Coca-Cola India’s Vice-President (Marketing), says the company is not in a race with its competitors and is rather interested in launching the best product. But the cola major was obviously conscious of the fact that it’s a late entrant and had to do something to make up for lost time.

That explains its move to price Nimbu Fresh aggressively. While Nimbooz is available in 200 ml and 350 ml plastic bottles at Rs 10 and Rs 15 respectively, a 400 ml Nimbu Fresh will cost Rs 15. There will also be a one-litre bottle for Rs 40.

The positioning of the lemon-based drinks by all the three players is almost similar: They are looking at making a dent in the large unorganised segment with each claiming that their products taste closest to made-in-home lemonade: While Pepsi is Nimbooz with the promise that it tastes as good as the original nimbu paani, Coke is playing on the theme —‘Bilkul Ghar Jaisa’ (just like home).

All the three players say the main aim is to convert consumers, who are presently being served by the unorganised market, to branded product consumers.

Both Coke and PepsiCo have lime offerings already — Limca, Sprite, 7 Up etc. But company executives say these are carbonated beverages and would not compete with the nimbu paani offerings.

Although a nascent category, the packaged nimbu paani was largely an untapped market. Most consumers are either used to drinking nimbu paani at home or pick up non-branded products. Earlier, beverage companies stayed away from the category because they would have no USP. Though the earlier examples of trying to introduce packaged drinks like tender coconut etc have not succeeded, Pepsi and Parle have already hit the jackpot with Nimbooz and LMN with sales much above their own expectations. Technology had played a big role to play in this. For example, while nimbu paani made at home doesn’t have much shelf life, Pepsi has used a technology called ‘hot fill’ that increases the shelf life of Nimbooz to as much as four months.

And everyone is clear about the growth path. Industry experts estimate the nimbu paani market to be at least around a billion cases by volume in 2010. The non-carbonated beverage segment is growing at double the rate of carbonated one in the Rs 7,000-crore domestic beverages industry. The juice and juice drinks market is pegged yearly at Rs 1,500 crore or 500 million cases by volume.

Experts believe that the ready-to-drink packs, along with the price points, will support the growth of the segment. “Ninety per cent of consumption of packaged juice and juice drinks is out of home, giving companies a great opportunity to grow,” an industry expert said.

First Published: Mon, January 25 2010. 00:38 IST