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Cola firms headed for energy war

Cola firms headed for energy war
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First Published: Wed, Jun 25 2008. 12 39 AM IST
Updated: Wed, Jun 25 2008. 12 39 AM IST
Mumbai: The local arms of the world’s largest soft-drink makers, Coca-Cola Co. and PepsiCo Inc., plan to launch their energy drink brands in India, attempting to compete with Red Bull GmbH, the Austrian maker of the eponymous beverage, and get a slice of the potentially lucrative market.
“We will launch a leading energy drink brand in India by the end of this year,” said a Coca-Cola India marketing executive working on the initiative. “The company sees a huge growth potential in the segment,” added the executive, who didn’t want to be identified because he is not authorized to speak to the media.
Tab, Burn and Full Throttle are the three energy drinks in Coca-Cola’s global portfolio. A senior executive at a market research firm, who has been involved in assessing the Indian energy drink market for one of the two beverage makers, said Coca-Cola is likely to introduce Burn first.
The company refused to confirm this. “We are continuously evaluating our product portfolio to provide consumers with the right beverage solution for every occasion,” a Coca-Cola spokesperson said in reply to an email. “We will respond (to the queries) as and when the company...is in a position to share details on specific brand launches.”
Rival PepsiCo Holdings India Pvt. Ltd is also preparing to bring to India one of the two energy drink brands from its global portfolio, Mountain Dew AMP and SoBe, Mint reported on 9 May.
Red Bull is now the only beverage in India’s energy drinks market. The beverage maker could not be contacted for estimates on sales in India, but market research firm Datamonitor Plc. said the energy drinks market in the country is worth around Rs500 crore.
According to the UK-based firm that tracks several consumer markets in India, the segment grew 50% year on year between 2002 and 2007. In contrast, the carbonated drinks segment, now valued at around Rs6,000 crore, grew at just 0.5% during the same period.
Datamonitor, however, said carbonated drinks still remain the most popular non-alcoholic ready-to-drink beverages in India, outselling all other categories including energy drinks, bottled water, juices and tea.
“Both Coca-Cola and Pepsi will try to get an edge in the energy drinks space because of the huge growth potential it has,” said Kaustav Ray, an analyst at Datamonitor. “There seems to be a pent-up demand for energy drinks among Indian consumers and with more brands made available in the market, the segment is likely to grow fast.”
He said the two companies are likely to nurse their energy drink brands with aggressive marketing and advertising. “This will put pressure on market leader Red Bull, which has, so far, maintained a low profile in the market while catering to a niche consumer segment only,” Ray added.
Coca-Cola had launched an energy drink, Shock, in 2001, but the product failed because of the lack of a market then.
While the market could be still small, its growth potential is enticing, said the Coca-Cola executive. “We will primarily target consumers in clubs, fine dining restaurants and modern retail outlets to sell our energy drinks,” he added.
PepsiCo has similar plans. “Pepsi will be launching the energy drink only at modern retail outlets as it is a niche and premium segment,” a senior executive working on the marketing plan told Mint in May.
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First Published: Wed, Jun 25 2008. 12 39 AM IST