The cliché pulling the world’s marketers to India’s doorstep

And the world’s largest soft drink company has just demonstrated the truth of another cliché—when it comes to marketing, size outweighs purchasing power. Sprite, its carbonated, lemon-lime flavored fizzy drink, has become the cola giant’s second billion-dollar brand in India after Thums Up, which it plans to make a comeback in India for a while. had achieved. During the Socialist People’s Rule.

“Sprite has become a billion-dollar brand in the market, driven by the success of locally optimized, opportunity-based global marketing campaigns and Screen Time,” Coke CEO James Quincy told analysts during a recent quarterly earnings call. ” Quincy also acknowledged that the increase in the worldwide quantity of coke came mainly from India, China and Mexico. In the Asia-Pacific region, which Coke defines to include India, volumes grew 9 per cent in the quarter ended September 30, 2022. Almost all of it came from India and China, the region’s two largest markets by population.

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In fact, Coke’s visit to India also demonstrates the truth of another cliché about India – that when it comes to food, Indians may tinker with global cuisines, but it is Indian tastes that strike Indian hearts and minds. Rule the stomach. Its global portfolio of brands – Coke and Fanta – lags far behind the ‘Indian’ brands in its portfolio – Thums Up, Maaza and Limca, a lemon-flavored carbonated drink made to look like the traditional Indian ‘nimbu pani’ went. ‘, which was originally developed by Ramesh Chauhan’s soft drinks business which was acquired by Coke.

This is a far cry from the efforts made in the early years following Coke’s re-entry. It tried to push its global brands and strangle Thums Up, Limca and Maaza, but eventually succumbed to customer pull.

The Indian consumer, in fact, forced both Coke and arch-rival Pepsi to develop a separate India playbook, after tried-and-tested methods failed in other developed markets. Both large cola companies were obsessed with increasing per capita consumption of their products, which they saw as a growth spurt. Theoretically, they were right. In 2022, carbonated soft drinks are expected to sell about 5.5 billion liters of the fizzy stuff, a little over 4 liters per person per year. In contrast, their home market, the US, has an annual per capita consumption of over 154 liters.

Where they went wrong was in execution. The focus was on increasing the volume by increasing the serving size. The minimum size increased from 180ml glass bottles to 300ml glass bottles and 500ml PET bottles. But they ran into another problem in the Indian market – high price sensitivity and low purchasing power. As the price per serving went up, sales fell – sizable. Coke brought back smaller bottles and even had to run a costly campaign featuring Amir Khan to re-promote the new entry price point. 5 per serving.

In fact, pouching, invented by unsung, Coimbatore-shampoo brand Chick as multinationals, was the key to cracking India’s market code. Chick’s pouches, priced at one rupee, soon garnered more volume than the global brands of P&G and Unilever, forcing them to follow suit. Today, almost every FMCG manufacturer in India relies on “magic price points” of Rs 1,2, 5 and Rs 10, which makes it accessible to the poorest consumer, albeit only occasionally. But then, the sheer size of the market – 1.3 billion consumers buying one rupee shampoo, two rupee detergent and five rupee noodle packets – adds up to a whole lot.

Of course, what’s good news for marketers doesn’t always have to be good news for the country. The WHO has a standing advisory against excessive consumption of sugary drinks, which demonstrates a good association with obesity and diabetes. Indeed, globally, consumption of sweetened soft drinks is declining in rich countries and rising in poor countries, and within rich countries, falling among the rich and rising among the poor.

In India too, recent research by ICRIER found that consumption growth of fizzy, sugary drinks varies inversely with income and education. Between 2012-13 and 2019-20, the purchase volume of carbonated soft drinks increased by 13.74 percent in the lowest socio-economic classification groups of D and E (based on education of the main wage earner and ownership of a defined set of consumer durables). basis) ) During the same period, purchase volume in the highest SEC A group actually decreased by 2.5 percent.

But unless public policy specifically addresses the issue, the world’s marketers will be banging a path on India’s door – purchasing power be damned.

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