RIL’s small Campa Cola deal is a major concern for the giants

But the size of the deal is deceptive. The acquisition is a triple drama that should not only really upset multinational cola giants Coke and PepsiCo, but also set other FMCG companies on fire.

For starters, not only is the Campa Cola brand but key to the cola business, cola concentrate—of which Pure Drinks had a really great version. Not surprising, as Pure Drinks, the country’s oldest carbonated beverage bottler, introduced Coca-Cola as a franchise bottler to India in 1949. And in 1977, when Coca-Cola decided to exit India instead of becoming an “Indian” company, Singh, the patron of Charanjit Pure Drinks, was quick to launch a ‘desi’ cola to fill the gap – Campa Cola. . The orange and lemon types also quickly followed.

If imitation is the sincerest form of flattery, Campa Cola was a very true tribute to Coke. Not only did the label and packaging look identical to the iconic US cola, but the product tasted almost like the real thing. So much so, that when Coke re-entered the Indian market two decades later, it ran an ad campaign branding itself as the “real thing”!

In fact, Campa Cola dominated the Indian markets (along with Ramesh Chauhan’s Thums Up, which was strong in the west of India) until PepsiCo entered India by buying out Ramesh Chauhan’s beverage business.

This strong brand recall – at least with older consumers – is likely to give a running start to RIL’s plan to grow its private label business. RIL already has ‘YES!’ There is a private label cola called. Which has taken away some shelf space from MNC brands in RIL’s retail outlets, but otherwise hasn’t created much. This may change soon, as apart from CAMPA, RIL is making a knack for acquiring over 50 exclusive brands in the grocery and FMCG sectors.

In another indication that RIL is planning to ‘public’ its cola private label and do away with it in the retail market along with Coke and Pepsi, it was reported late last year by T. Krishnakumar, former head of Coke’s India business. is appointment. In fact, some other top executives of Coca-Cola India also joined RIL along with Krishnakumar.

But exiting the private label business – where distribution is guaranteed by one’s own retail arm – and entering the FMCG space justifiably poses a number of challenges, not least of which are getting millions of smaller retailers to sell your product. Do not include. Here, RIL has an edge since its payment solution, Jio Pay, which also has a point-of-sale device for collecting contactless payments, has already made some inroads into an estimated 15 million small kirana stores in India. Is.

Ambani’s track record shows that if he fails to get ahead in a business early on, he becomes twice as strong after internally doubling the lessons of early failure. The story has repeated itself time and again, from the Reliance-Bombay Dyeing Petrochemicals war to the initial head-butting of Reliance Retail with Biyani’s Future Group. After failing to create an edge against the competition the first time around, RIL is today India’s largest physical retailer, and is the dominant owner of Future’s retail business.

Back in 2009, Reliance Retail attempted to buy some soap brands in India manufactured by German FMCG player Henkel. It failed, but a decade later, Henkel is effectively out of India, while RIL is bringing the brand. So the fact that this is RIL’s second attempt to grow its FMCG business inorganically through acquisitions should really be a matter of concern to its competitors.

But maybe they don’t need to worry. According to Forrester Research, India’s grocery market doubled from $300 to $600 billion between 2013 and 2019 and is expected to grow 50 percent to over $800 billion by 2024. That speed of expansion can leave enough room for everyone.

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