Page 85 - IACC Newsletter March-April 2014 Issue 03

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Indo-US Corporate News
Coke to beef up portfolio, enter dairy segment in India
Beverage giant Coca-Cola India is betting on a bevy of new launches to go one up on its rival PepsiCo in the coming season.
On the anvil is a low-calorie variation of Coca-Cola called Coke Zero, a relaunch of its energy drink Burn and a pan-India
launch of its dairy-based drink Maaza Milky Delite.
Interestingly, senior executives at the Atlanta-based company are unfazed by the fact that Diet Coke, a sugar-free soft
drink, is already present in the market. "In taste, Coke Zero is nearly identical to Coca Cola, something that Diet Coke is
not. It was created with young adults in mind. Its look, positioning, communication is very unlike a diet drink and therefore
a lot of young adults, go getters identify with the brand," Venkatesh Kini, head of Coca-Cola India told the media.
Though diet drinks currently have about 1% share of the carbonated soft drinks market in India, Coca-Cola is banking on its
new product to become a potential game changer in the category when it is introduced in the second half of this year.
Launched in 2005 globally, Coke Zero is estimated to be the seventh largest carbonated soft drink in the world today by
retail value.
However, Coca-Cola's trump card might well be its foray into India's dairy segment with its milk-based drink Maaza Milky
Delite. After being test marketed in Kolkata, the beverage made from milk and mango pulp will now be rolled across the
country in 200-ml tetra packs that will be priced between Rs 15 and Rs 18. "Since, it's a milk-based product we wanted to
make sure that it can withstand India's extreme weather conditions. The inputs from our experiment in Kolkata made us
go back to the lab and develop a product that could survive without a cold chain," said Kini.
Kini also confirmed the relaunch of the energy drink Burn that had met with a tepid response after it was introduced in
2009. "We were selling Burn at select outlets in Delhi, Bengaluru, Mumbai and Hyderabad since we were importing it.
Now, we are producing it locally, so you will see us launching it across 15 other cities," he said.
Burn is sold for Rs 75 for a can and is the company's second energy drink after Shock that was launched in 2001. While it
failed to impress Indian palates, Burn is set to compete with Tzinga and Red Bull among others, in the country's Rs 600-
crore energy drink market.
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Cadbury investing heavily in sales to expand market in India
Cadbury brand owner Mondelez International is investing heavily in sales and route-to-market expansion in India, a
priority market for the American food giant where sales have slumped to their lowest since 2005. "We increased our sales
infrastructure with one lakh visicoolers in the market and the company took big strides by expanding into rural India and
reaching seven states in 2013," a spokeswoman for Cadbury India said.
According to data provided by Mondelez, its India business grew in the "low-teens" in 2013. It was 21% in 2012 and over
30% in the preceding years. Cadbury India attributed it to economic slowdown, increase in commodity prices and the
depreciation in the rupee.
Although India is one of the fastest growing markets for chocolates, domestic sales of the commodity have fallen with
consumers spending less due to the economic slowdown. In 2013, growth in overall food segment slowed to 11.6%, from
over 17% in the previous year, data showed.