 "Paper Boat")
With a large segment of Indian consumers shifting to non-carbonated beverages from regular cola drinks, beverage and food giant PepsiCo is preparing to grab a share of the changing market fuelled by consumer habits.
The first move towards this direction is its decision to roll out 7UP Nimbooz Masala Soda nationally this summer.
“We’ll take 7UP Nimbooz Masala Soda national this year. If not everywhere, it would be available across large parts of the country this summer,” says a senior official at PepsiCo, who wished to remain anonymous. However, it may happen in phases throughout the year.
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Masala soda or ‘Banta’ in certain parts of the country, traditionally sells in hand-pushed carts or stalls (and is a beverage made by mixing soda and cool, spiced lemon water). The 7UP Nimbooz version was tested by the American beverage giant since 2012 in different parts of India.
According to market sources, the company is also working on several other traditional Indian beverages that may hit retail shelves for test marketing over the next few months.
Local flavours in packaged beverages has largely been populated by small local brands with the exception of lime and lemon drinks where both Coca-Cola and Pepsico have well-backed entries.
An analyst tracking the sector, says of PepsiCo’s expected new traditional drinks targeting the local palate, “These are likely to hit the market for testing over the next couple of months. But formal launches are likely to take place later this year, or next summer.”
7UP Nimbooz Masala Soda, which was first test-marketed four years back, was distributed in select parts of the country so far.
PepsiCo had bought a century-old regional brand almost a decade back, called Duke’s, which had flavours from lemonade, raspberry, masala soda to gingerale and ice-cream soda. But its presence beyond Mumbai is yet to be extended.
PepsiCo has five beverage brands – Pepsi, 7UP, Mirinda, Slice, Mountain Dew – that generate estimated annual retail sales of Rs 1,000 crore or more. It has so far focused mostly on carbonated beverages and juice-based drinks.
However, traditional Indian beverages emerged as a fast-growing category after companies like the Gurgaon-based Hector Beverages launched niftily packed drinks such as such as aam panna (a desi mango cooler), jal jeera (fried cumin-laced water), and even low-calorie entries such as sattu (an eastern Indian drink made of fried gramflour and water), tulsi (Holy basil) tea, ginger tea etc. under the brand Paper Boat from August, 2013.
Following the success of Hector Beverages, even Dabur India entered the functional drink market with aam panna last year.
Paper Boat drinks sell in sleek, multiple-serve flexible packs with prices starting from Rs 30, and now have no less than 10 varieties.
In the past few years, both PepsiCo and Coca-Cola have been focusing on non-carbonated beverages, even globally.
The sales of their key carbonated brands, especially cola brands, have been flat or declined in many parts of the world, including their home market – the US.
PepsiCo’s move to expand its Indian traditional beverages is part of its global strategy to boost its non-carbonated beverages portfolio.
The fortified, functional non-carbonated drinks market in India is projected to cross Rs 1,000 crore by 2015 end, according to industry estimates. It is albeit low compared to the carbonated drinks market which is pegged at about Rs 10,000 crore at present.
Even then, the growing category will grow as energy-drinks, flavoured water and a host of other drink formats find their way into the market.
Indian was marked as “a high priority market” by PepsiCo Chairperson & Chief Executive Indra Nooyi in an investors’ call earlier this fiscal last year.
Nooyi added that the company’s business in India was growing at a double-digit rate. She also said the company planned to infuse about Rs 33,000 crore by 2020 to ramp up operations in India.
