Bottle freezing: quenching thirst for growth

After the epidemic stalled from sales for two consecutive summer seasons, the carbonated beverage industry is banking on a return to the summer of 2022. The soft drink majors, led by PepsiCo India and Coca-Cola India, are strengthening their partnerships with e-commerce and hyperlocal players to reach the final milestones and expand their rural reach.

According to a research and market report, the carbonated beverage segment in India was `13,460 crore in FY20 and is expected to reach` 34,964 crore by FY27, expanding to a CAGR of 15.12% during FY 22-27.

Vague ambitions

A PepsiCo India spokesperson said: “This year, the goal will be to maintain a universal presence in terms of availability and usage.” PepsiCo is strengthening its distribution network through both traditional and e-commerce channels for customers across urban and rural geographies. Since the onset of the epidemic, it has been actively partnering with platforms such as Udan, BigBasket and Suigi.

The company has, over the past two to three months, seen an increase in demand for both household penetration and repeat order / frequency through online platforms.

Tish Condeno, senior director at Coca-Cola India and Sparkling Flavors in Southwest Asia, shares that in the fourth quarter of CY21, the company grew its e-commerce sales threefold.
The corresponding period of the previous year, and therefore accelerated the investment plan behind the digital venture in 2022.

Parle Agro is working on a SKU-powered strategy to reach consumers for home use. It has introduced Appy Fizz and B Fizz in 160ml PET bottles at a low price of `12, which could help increase its reach in the regional market.

Anurag Mishra, Principal, Kearney, predicts a strong double-digit volume growth this year as sales in hotels, restaurants and cafes continue to grow along with modern business. Brands are expecting sales growth from out-of-home spending as cities return to normal, supported by early and unusually hot summers.

However, the overall loss of sales during an epidemic is less likely to be offset by increased sales during the summer season. “While sales of cold drinks should be fairly strong this year, outdoor use may take another two to three years to reach pre-epidemic levels,” Mishra said.

Marketing blitzkrieg

Nadia Chauhan, Joint Managing Director and CMO, Parle Agro, however, maintained that the firm had witnessed a revival in out-of-home costs as customers resumed their daily commute. The company’s marketing budget this summer is `200 million – 20% more than last year’s budget.

Parle Agro has launched four campaigns to connect with customers through multiple channels including television, OTT, digital and outdoor. Its commercials are being aired on Star Sports Channel as well as Disney + Hotstar during Indian Premier League broadcasts, as well as during world television premieres of some films.

Bollywood celebrities are clearly the favorites in approving drink brands Shah Rukh Khan is backing Thomas Up from Coca-Cola Stable for his Storm campaign, where rivals PepsiCo have brought in Salman Khan, Hrithik Roshan and Mahesh Babu. Parle Agro is relying on the star power of Priyanka Chopra, Alia Bhatt and others for many of its brands.

Rajat Wahi, partner, Deloitte, advises brands to expand their rural footprint, such as through the government’s CSC Grameen e-store and tailor-made contact with customers in these markets. He noted that during the epidemic, people turned to healthy alternatives, such as coconut water, lemonade, immunity drinks, fresh juices, etc., which would have some effect on the cold drink business.

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