Vitamin ‘C’ means Vitamin ‘Cola’; right?

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The total size of the Indian beverages industry (including both carbonated & non-carbonated drinks) is Rs.7,500 crore. While a majority of it (80%) is dominated by the carbonated drinks segment, with fruit-based drinks being worth Rs.1,000 crore, the remaining Rs.1,500 crore is accounted for by the non-carbonated segment. Hence for drinks like PepsiCo India’s Nimbooz, Coca-Cola India’s Fanta Apple and Parle Agro’s LMN and Appy Fizz, there exists immense potential in the marketplace considering there aren’t many national players competing on this front. Elaborating on the potential this category holds, Alpana Titus, Executive Vice President-Flavours, PepsiCo India told 4Ps B&M, “The market for fruit beverages is too under-developed with not many players. If volumes go up, investment will automatically drive in the segment.” Interestingly, both Fanta Apple and Nimbooz have been launched under a strong parent brand – Fanta and 7UP respectively. Both these products (Fanta Apple and Nimbooz) have been pitted against Parle Agro’s Appy Fizz and LMN. Both LMN and Nimbooz are positioned as ready-to-drink, convenient and hygienic nimbu pani.

However, while Nimbooz is targeting the ‘on-the-go’ audience by thriving on the ‘Ekdum Asli Indian’ positioning; LMN is being promoted as a healthy drink for both youth and adults by highlighting the medicinal benefit of Vitamin-C in the drink. Commenting on the positioning of LMN, Nadia Chauhan, Joint Managing Director & Chief Marketing Officer, Parle Agro Pvt. Ltd told us, “Imagine LMN as a beverage that is found on business class of some of the most premier airlines of our country and the same beverage you find in the most rural markets of our country.” Both Fanta Apple and Appy Fizz are positioned as a youthful drink. Where on one hand, Fanta Apple compliments the bolder and expressive shades of the youth; Appy Fizz, on the other, is a drink for those fun-filled moments youth enjoys with friends.

But having a distinct positioning would not alone help these companies to capture a fair share of this price-sensitive market. Carbonated drinks have always lied in the low-involvement impulse buying category. Hence it is imperative that PepsiCo India, Parle Agro and Coca-Cola India get their pricing strategies right. The starting price point of Fanta Apple is Rs.8 and Rs.10 for 200ml and 300ml returnable glass bottles (RGB) respectively; Appy Fizz starts with Rs.18 for a 300ml stock keeping unit (SKU). Such pricing may prove to be a big blow to Appy Fizz, which although is a front-runner in the apple flavoured carbonated drinks segment, yet there isn’t much customer loyalty to the brand because the audience for the drink is niche and limited. Secondly, Fanta Apple carries the legacy of brand Coca-Cola India, which is the market leader. Fanta Apple also scores high with its 600ml PET bottle (Rs.22) as compared to Appy Fizz’s 500ml (Rs.25) and one litre (Rs.45) SKUs.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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