Pepsi, Hind Lever in ready-to-drink push

Pepsico International and Unilever are extending their 'Pepsi Lipton' alliance to India.

As part of the alliance, both the companies plan to introduce more ready-to-drink (RTD) products under the Lipton brand. The Pepsi-Lipton alliance in India is being built upon its success in the US and other select global markets.

To take it forward, the alliance has re-launched Lipton Ice Tea in glass bottles and polyethylene therephthalate (PET) containers. It is looking at the youth segment as more than 57 per cent of the Indian population is below 28 years which increasingly spend on healthcare products.

"Among the youth, health is in the space of 'looking good' through the increasingly popularity of gyms," said Rajeev Bakshi, chairman, Pepsi India Holding.

"Lipton Ice tea augments Pepsi's portfolio of healthy refreshment beverage, complementing brands such as Tropicana and Aquafina," he said.

"After the success of Lipton Ice tea under the liquid refreshment beverage (LRB) category, more products from the Lipton lable will be introduced," said S Ravindranath, managing director, foods division of Hindustan Lever Ltd (HLL).

Through the alliance, both the companies plan to create a separate category called healthy refreshment beverage. "This market is non-existent and is currently valued 5-10 per cent of the Rs 6,000 crore consumer spend on carbonated drinks," said Bakshi.

According to a study, RTD tea is the fastest growing in the LRB category, growing at a 22 per cent compounded annual growth rate during 2000-04, compared with juice/juice drinks at 9 per cent, water 10 per cent and others 6 per cent.

Lipton Ice Tea will be made available in 17 cities across India to be built on Pepsi's market leadership as refreshment beverages in a host of packaging formats "" 250 ml glass (Rs 9), 500 ml PET.

Pepsi with its non-carbonated brands and HLL through its ready-to-drink portfolio (Lipton brands) plan to create significant synergies, including topline growth and value.

The Indian alliance draws on the strengths of both the companies. HLL brings the Lipton brand, its global favorite ice tea products, and Unilever's research & development capabilities for tea-based beverages. Pepsi on its part is extending its extensive bottling and distribution system, with its strong customer insights and beverage know-how.