Feb 21, 2020
According to the official sources citing the data from Nielsen, domestic beverages ready-to-drink brands, including Sosyo, Jayanti, Bovonto, Kashmira and Runner when put together summed to more than twice the rate of big brands viz Coca-Cola and PepsiCo in 2019.
All the total local brands collectively increased their value share in the Rs 20,000cr-plus, non-alcoholic ready-to-drink retail beverages market to 24% last year. This figure is almost half the size of industry leader Coca-Cola’s 49.9% share and well ahead of PepsiCo’s 19.6%.
Coca-Cola and PepsiCo has lesser existence in II tiers and III tiers cities as their presence is still under-penetrated. Business incentives, lower pricing for some brands, marginal overheads on marketing and logistics are helping regional brands to take the market share and increase its growth in spite of the two big cola players’ captured market.
“Despite the rollout of the goods and services tax (GST), we grew significantly over the previous year,” said J. Ramesh, joint managing director at Chennai-based Kalimark Group that produces Bovonto soft drinks. Currently available in Tamil Nadu exclusively, the Bovonto brand is being extended to other markets in South India also, cited Ramesh.
“While we don’t have bandwidth of multinationals in terms of budgets, growth indicates the potential of regional brands, we recognize that there are diverse consumers across the country and continue to focus on building a consumer-centric portfolio, including catering to regional and hyperlocal tastes.” He cited examples such as jeera drink RimZim and Minute Maid Colors.
The producer of the country’s top two fizzy drinks Thums Up and Sprite and the rival company PepsiCo had in past set up focused groups to study regional brands and extend their own reach to new markets and segments. A PepsiCo India spokesperson claimed sales growth of the company’s beverages portfolio “is ahead of the industry growth number called out by Nielsen”. “We are currently seeing a huge uptick in our business with all the brands in the portfolio showing very good momentum and gaining consumer equity,” was the reply.
According to available data, Coca-Cola grew its share in the non-alcoholic ready-to-drink beverages — inclusive of packaged carbonated drinks, water and flavoured waters, sports drinks and juice drinks — by 0.5% year on year in 2019, while PepsiCo India’s share fell -2.2%. Regional brands put together grew 1.2% during the year.
Soft drinks and flavoured waters are presently taxed at 40% which includes 28% tax and 12% additional cess. Within overall beverages, carbonated soft drinks have been growing faster, riding on prices that are almost a third that of juices. A one-litre pack of any branded juice is priced at about Rs. 90-110, while a two-litre pack of any carbonated drink is priced about Rs. 70.