China and India are changing not just the global pecking order. Even the swilling order is changing.
A demand surge in the leading Asian markets rescued cola-makers PepsiCo and Coca-Cola from plunging volumes and sales in North America, their traditional strong-hold, to post healthy profits for the quarter-ended December 31, 2009.
Industry observers attribute high growth in India to a low base effect wherein sale of packaged beverages account for a mere 4 per cent of the total 120 billion liters of beverages sold in the country. “The potential for our growth is immense,” Anand Singh, director, marketing, Coca-Cola told Hindustan Times.
Of the country’s estimated Rs 8,000 crore beverage market, the two colas account for Rs 3,800 crore.
Global beverage volumes of Coca-Cola grew by 22 per cent in and of PepsiCo by 21 per cent. But in North America, beverage volumes shrank by 1 per cent for Coca-Cola and 5 per cent for PepsiCo, while net revenues declined by 4 per cent and 2 per cent respectively.
In fact, international sales in emerging markets is increasingly becoming important for cola companies, as consumers in developed markets cut back on cola consumption and migrated to fresh juices.
The two cola majors have now chalked out specific strategies for India.
PepsiCo plans to introduce smaller packaged snack products like Lay’s, Uncle Chips, Kurkure and Aliva. “Apart from decreasing the pack size we are also altering the ingredients to limit the salt content and saturated fats,” George A Mensah, director PepsiCo Corporate Research & Development told Hindustan Times.
Coca-Cola has products only in the beverage category. It too has been bringing smaller packs for the Indian market.
“PepsiCo will stress upon advertisement of products based on fruit and vegetables for children under the age of 12,” Mensah said. Coca-Cola, on its part would plans to strengthen its association with cricket and youth. “Thums Up has a larger connect with youth which along with Coca-Cola gives a wider choice to people,” Singh explained.