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re : Indian PepsiCo /WSJ



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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