Business News Food

This summer, Campa Cola from Reliance could spark a price war.

The relaunch of homegrown soft drink brand Campa Cola at price points up to ₹15 lower than Coca-Cola and PepsiCo brands across five different pack sizes has raised the possibility of an aggressive price war in the upcoming summer season.

Both Coca-Cola and PepsiCo have directed their teams to step up trade discounts, consumer promotions and local marketing spends with immediate effect, trade insiders told Retale.

“It’s not possible to drop prices immediately – that requires approvals and aligning with bottling partners…plus there are inflationary pressures,” said a senior executive at one of the US beverages giants who requested not to be named. “But trade offers and promotions are being stepped up immediately.”

The person said soft drinks is “a daily consumer demand game”, particularly in peak summer when offtake sees “very high traction”.

Reliance Consumer Products, the fast-moving consumer goods arm of billionaire Mukesh Ambani’s Reliance Retail Ventures Ltd, had on Thursday announced the launch of the Campa brand in cola, lemon and orange variants in Andhra Pradesh and Telangana, and said it will soon roll out the products in other markets.

Andhra is the single largest market for Coca-Cola-owned Thums Up, the country’s largest soft drink brand with a share of close to 20%.

“Whether or not there’s a long-term impact has to be seen, but initial consumer traction to Campa Cola is certain to play out,” said an executive at a leading cola bottling company.

This is the first time Coca-Cola and PepsiCo are being challenged in India – a market they have dominated since the early 1990s.

“The emergence of more players in the market presents a great opportunity for further investments to develop the market and provide consumers with innovations that evolve the category and ultimately benefit them,” a Coca-Cola spokesperson said in response to ET’s query. “Coca-Cola will continue to invest in building capability and capacity in the country,” she added.

Ravi Jaipuria, chairman of PepsiCo’s listed bottling partner Varun Beverages, said the Indian market is “big enough and has a lot of buoyancy”.

“Reliance has distribution muscle, and we will do what is good for the market and for us,” he told Retale. “As far as pricing goes, it is not an independent decision which we can take on our own and involves several stakeholders.”

Brokerage house Nuvama Institutional Equities in a report on Thursday had said, “Reliance’s entry into soft drinks is potentially negative for Varun Beverages, as this could become a three-player market.”

Campa Cola’s lower pricing is also bound to impact regional brands like Bovonto and Jayanti Drinks, which play on pricing as a core competitive edge, executives said. Kali Aerated Water Works, maker of Bovonto soft drinks, is a prominent player in Andhra Pradesh and Telangana besides Tamil Nadu.

“Yes, there could be initial impact in consumer offtake,” said an executive at a regional brand who requested not to be identified. “We have to step up our own marketing and promotional spends, which we are doing.”

Reliance had acquired the five-decades-old Campa Cola from Pure Drinks Group last year for Rs 22 crore. The brand was popular in the 1970s and 80s before fizzling out in the 1990s when Coca-Cola and PepsiCo started their domination.

Reliance had been selling Campa Cola exclusively through JioMart and Reliance stores since mid-2022.

“The rollout of the cold beverage portfolio across India is aligned with the company’s vision of offering value to consumers at affordable price points,” Reliance Consumer said in a statement on Thursday.

It said the launch is in line with the company’s strategy to promote homegrown Indian brands.

Reliance Retail Ventures, the holding company of all the retail businesses under Reliance Industries, has a channel network of 17,225 stores besides ecommerce platforms including JioMart.

With the early onset of summer, summer-centric products including soft drinks and ice-creams are seeing high double digit growth, with companies rushing to stock at both physical grocery retailers and online stores.



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