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re : Indian PepsiCo /WSJ
- Subject: re : Indian PepsiCo /WSJ
- From: cd@xxxxxxxxxx
- Date: Sun, 23 Jun 1996 03:33:00
care of Dawn Star, EuroBurmanet
21 Jun 1996 00:44:53 -0400 (EDT)
Subject: Coke and Pepsi throw cans into the Indian-market mix: Asian WSJ
Asian Marketing: Coke and Pepsi throw cans into the Indian-market mix
By RASUL BAILAY
Staff Reporter of THE WALL STREET JOURNAL
June 21, 1996
The Cola War in India is shifting to a new frontier: cans.
U.S. soft-drink giant Coca-Cola Co. and archrival PepsiCo Inc.,
which
have been battling over soft-drink guzzlers in India during the past
few
years, are now introducing cans to the market.
Coca-Cola was the first to hit Indian food stalls and shop shelves
with
cans when it launched canned Coke and orange Fanta in Bombay in
January.
The next month, Coke and Fanta in cans arrived in other major cities.
In April, Pepsi retaliated by launching Pepsi-Cola, Seven-Up and
orange
Mirinda in cans in Bombay. Last month, thirsty residents of the
country's other big cities got their first chance to pop open a can.
Coca-Cola had more in store. It has relaunched Thums Up, a local
cola
brand that it acquired from the local Parle Group when it returned to
India in 1993 after a 16-year absence.
Thums Up had lost market share under Coca-Cola's stewardship
because
the U.S. company devoted more attention to its own line, market
researchers say. Realizing the brand value of Thums Up -- it outsells
Coke in India -- Coca-Cola decided to give the beverage's image a
facelift, with a splashy advertising campaign and the introduction of
cans. So far, Thums Up in cans is available in Bombay and other big
cities. Coca-Cola launched lime-drink Limca, another Parle brand, in
cans in New Delhi on May 24.
Despite all the hoopla, neither Coca-Cola nor Pepsi is expecting can
sales
to represent a big chunk of India's burgeoning soft-drink market. So
far,
"the response is very encouraging," says Depak Jolly, a spokesman for
PepsiCo India Holdings in New Delhi. But, he adds, can sales are
expected to represent less than 10% of revenue in the next few years.
A
spokesman for Coca-Cola says that cans now represent just 10% of
sales.
The reason: Soft drinks in cans are expensive, partly because the
empty
cans must be imported. Coca-Cola ships them in from the U.S., while
Pepsi is buying them in the Middle East. Most drinks in returnable
300-milliliter bottles cost 6.50 rupees (19 U.S. cents) a pop, while
the
330-milliliter canned beverages sold by Pepsi cost 15 rupees.
Coca-Cola
charges 18 rupees for its canned drinks in Bombay, and prices will
rise
from 15 to 18 rupees next month in the rest of the country.
Sales projections for cans may not be large. But beverage companies
say
they are keen to cultivate India's new middle class, which numbers
between 150 million and 250 million people and is beginning to indulge
in Western-style fast food and beverages.
Britain's Cadbury Schweppes PLC plans to launch its traditional
noncola
products, including Canada Dry, orange Crush and Schweppes Lemon
in cans later this month. The price will be 18 rupees.
U.S. Ice-Cream Company Targets India's Middle Class
Baskin Robbins ice-cream parlors are sprouting across India to
dish
up the chain's traditional 31 flavors, and customers say they are
loving
every creamy lick. But it isn't an everyday indulgence for most
Indians.
"Their ice cream is definitely expensive," say Sadat Noor, a
25-year-old
university student in New Delhi. "I can only visit them once a month."
One scoop of Baskin Robbins ice cream sets Mr. Noor back 31
rupees.
So, he satisfies his passion for ice cream at Nirula's, a fast-food
chain
that offers 21 flavors at its restaurants -- at 18 rupees a scoop. He
reckons that he visits a Nirula's two or three times a week.
Baskin Robbins doesn't apologize for its price. It says the quality of
its
Indian products matches those sold at its outlets world-wide -- and
they're cheaper. "We are the most economical among Baskin Robbins in
the world," says Rajiv Varma, general manager of the Bombay-based
joint venture between the U.S. company, a unit of U.K.-based Allied
Dome PLC, and a local ice-cream maker, the Ghai Group. He says
Baskin Robbins' Indian products are 15% to 20% cheaper than in
Thailand, South Korea, Indonesia and Japan.
Baskin Robbins in India imports some ingredients for its flavors
from
the U.S. to ensure "uniformity of the standard," says Mr. Varma.
The first Baskin Robbins in India opened in December 1993 in an
upmarket Bombay neighborhood. There are now 25 outlets across India,
including six in Bombay and three in New Delhi. Mr. Varma says the
company plans to expand mainly in upper-middle-class residential
areas.
"Our target customers are people who travel and know our products."
But with more money in the pockets of many urban Indians, someone
is
always prepared to splurge. "It is expensive, but it is worth it,"
says
Jhanvi Sharma, a 22-year-old housewife, after buying a multitude of
flavors to take home. "People are spending more money these days," on
luxury food items, she says.
Counting on customers such as Ms. Sharma, Baskin Robbins hopes to
boost the number of outlets in India to 40 by the end of the year. All
told, it hopes to have 75 outlets by Sept
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