Bisleri banking on new recipe but intense competition may make going tough

Bisleri is looking to double its core business of mineral water during the coming summer by sprucing up distribution and it is just as bullish about its fizzy drinks. Uniquely developed “healthier” products with natural ingredients in the mix, a focus on general trade channels and scaling up a small bouquet instead of going for multiple offerings are what would help it grow, says the company.

The assertion of Anjana Ghosh, director, marketing and business development, Bisleri International, that the company eventually aims to lead the Rs 16,000 soft drink market (source: Bisleri, Euromonitor International pegged it at a much higher Rs 92, 419 crore in 2019) in India, is too futuristic at this time even if it comes from the category leader in packaged water. The immediate goals remain two-fold: To double the sales of its carbonated drinks — the spiced Spyci, the mango juice-based Fonzo and the minty lemon drink Limonata — by this summer and in three years, take the cumulative share of these three in sales to 20 per cent (up from 5-7 per cent last year) of what the flagship mineral water business both in terms of volume and value.

This sounds challenging because the current share is 5-6 per cent and the company has aggressive plans for water too which means the drinks sales will have to not just keep pace but show a much higher momentum. 

And recent history is not very flattering to say the least. In 2016, the company first launched four drinks as variants of the umbrella brand name Pop only to see them fizzle out soon after. It returned with Fonzo in 2018 and then the others were relaunched. 

So what gives the company hope that it will be second time lucky? Ghosh says that their products do not compare with any existing brands. “We have ensured that Fonzo is much thicker than any existing brands, the fizz is rightly combined to give the uplift and body to the drink. Spyci has distinctive masalas which are not commonly found in any exiting spiced flavour drink that are either boringly jeera or lemony. I can challenge there is nothing similar in the market. It not only has the Indian green lemon and lime juice, it has fresh pudina oil extract which leaves a very refreshing taste in the mouth. The mint flavour drinks available in the market taste like toothpaste, chewing gums,” she doesn’t hold back while discussing competitors’ offerings.

But the real challenge is that the company is pitted against two giants — Coca Cola and Pepsi that have diversified their portfolios and are even launching hyper local drinks. Asked if that approach will make life tougher for Bisleri, Ghosh says: “…In India each state has different palate, within the state there different food habits. So up to what level does one hyper-localise? We are confident we have brands with flavours and taste that are appreciated across the country. National brands like us should concentrate on unifying taste.”

Yet the opportunity is immense in beverages, say Devangshu Dutta, chief executive, Third Eyesight and Harish Bijoor, founder of Harish Bijoor Consults Inc. Dutta says that given per capita consumption in India is low and soft drinks are seen as aspirational products, people tend to consume more as income grows. Bijoor, on the other hand, cites his research to say that there are at least 11 new options for a new soft drink consumer. And those are exclusive of the three offerings from Bisleri. That said, the scope for growth is still high. The per capita consumption in India is low when compared to developed markets. 

Ghosh identifies general trade or GT as the preferred vehicle for sales for the sheer volumes they bring. This will be followed by bakeries, fast food and eating joints, she adds. The sales team is also in talks with many quick-service restaurants (QSRs), she says. Dutta of Third Eyesight says these tie-ups are a good proposition for any brand as they ensure captive sales and improved brand visibility.  

An area sales manager or ASM associated with one of the two cola giants — who has recently made a transition to GT from modern trade (MT) for the company in one of the biggest urban territories in the country — has some advice based on field insights. Having witnessed the brand entering the said market, she found that while the shelf occupancy at MT was good, in GT channels it hasn’t been as aggressive so far. “Also, a new player has to incentivise sellers through distribution of branded refrigerators. These can be game changers in some low-income areas. Then again merely entering distribution channels is not enough. For example, a Thums Up or a Pepsi are far more popular in bars as drink mixers whereas a parent at a shopping mall would hesitate buying her kid a strong drink and go for a milder one. So you have to distribute accordingly,” she adds.   

The ASM says that deep down in the distribution channels, the colour and appearance of the beverage plays a part and this is the case at the customer end too. So when the company launched a red coloured energy drink recently, the bottles attracted children and translated into those being picked up from the sales counter instantly while its blue can failed to have the same impact. And these field insights came from an area where the company itself did not have much hope. 

Bisleri soft drinks have some way to go as far as sampling is concerned, she points out. Perhaps the company itself has sensed this and is running a buy 1-get 1 offer as part of its sampling drive, apart from associating with youth events and shows, as some recent reports suggest.

Was that the case when Bisleri's products re-entered the market as standalone brands but the pinacolada flavour was dropped? Or was it because the consumer is shy in trying out unfamiliar names? Ghosh says that this was done despite a positive response because the company thought there would be too many brands to handle — each new offering needs nurturing and time to flourish. In fact, she adds, a pinacolada drink may be added in the near future.

But there is another question that the consumer has begun to ask, says Dutta: "Is it healthy?" So if you are not going to address that, anyway it's a losing proposition in the long run. And this movement has started even in the home markets for Pepsi and Coke. “We also thought of value adding to these brands by making them healthier by mixing actual juice rather than keeping them just like other brands in the market which are basically synthetic,” Ghosh says. 

Despite adding natural juices, the sugar and carbonated water content will expectedly be high. Ghosh doesn’t see this as a deterrent at all. “We did a small consumer research before we got on to developing these brands. Across age groups respondents said that when they indulge in such products they are aware of the content of sugar but they are not consuming it regularly. At the time they want to relax and have fun they just want to enjoy and not bother about sugar.”