How Thums Up stole the cola thunder
Last week, Coca-Cola Co.’s Indian unit celebrated 40 years of its carbonated beverage brand Thums Up, which has annual sales of Rs5,000 crore. The company said it intended to increase it to $1 billion (Rs6,400 crore) in two years. The target is ambitious, with the brand growing at 5-6% a year for the last couple of years, according to numbers shared by a company executive, but not impossible to achieve as it is the largest cola brand in the Coca-Cola portfolio.
Coca-Cola Co. bought Thums Up from Ramesh Chauhan’s Parle Bisleri Ltd in 1993 along with Maaza, Limca, Citra and Gold Spot, of which the last two were discontinued by the American beverage maker.
However, Thums Up stayed. And even though Coca-Cola Co. invested heavily in promoting and marketing its flagship beverage Coca-Cola or Coke, it couldn’t beat the home-grown cola brand. There are several reasons why Thums Up continued to thrive. To say that it followed a distinct marketing strategy would be an oversimplification of the reasons behind its numero uno position.
For starters, it enjoyed favourable circumstances in the initial years of its launch. Ramesh Chauhan started Thums Up when Coca-Cola exited India in 1977. The absence of Coke (there was no Pepsi at that time) created a vacuum in the market which Parle took advantage of. Although Thums Up faced competitors such as Campa Cola, Double Seven and Thril, Chauhan’s brand enjoyed a massive distribution advantage in the country, thanks to its other two fizzy drinks—Limca and Gold Spot.
So when Coca-Cola re-entered the country in 1993 after an absence of 16 years, it had to contend with Thums Up, which dominated the Indian market with more than 80% share. Pepsi, Coke’s traditional international rival, which it always considered its main competitor, was a distant number two.
When Coke arrived, Indian marketers started writing the obituary for Thums Up, “believing that the India market would be reduced to a two-horse race between the two international giants in a matter of months. I am sure that the folks in Coca-Cola’s Atlanta headquarters also thought the same. But as we all know the script played out differently,” says Samit Sinha, brand expert and managing partner, Alchemist Brand Consulting.
It’s not difficult to see why. To be sure, Thums Up never tried to become a Coca-Cola clone, either in taste or in name. “This gave it a distinct identity and prevented it from being unfavourably compared to Coca-Cola as its poorer cousin,” says Sinha, who worked briefly on Thril (from McDowell & Co.) during a stint at ad agency Lintas. That is not all. An entire generation grew up on Thums Up in the absence of Coca-Cola.
“It is also entirely possible that Thums Up received an additional boost through the resurgence of desi pride in the 1990s following liberalization, when desi became cool,” he adds.
Over the years, consistency in Thums Up’s advertising also helped it to stay relevant. The initial communication campaign was built around the theme of Happy Days Are Here Again as an antidote to the feeling of loss in Coke’s absence. But Parle quickly realized that it could not fight Pepsi and its deep pockets on a generic, undifferentiated platform. Wisely, it switched to a campaign that highlighted its distinct taste with the enduring line Taste The Thunder. “It is not incidental that the last word, Thunder, had a strong phonetic resemblance to the Hindi word for cold, which is thanda, which is the colloquial term in India for cold drinks in general,” says Sinha.
In terms of advertising, Thums Up stayed ahead of its time. It created campaigns that were cool, edgy, quickly adopting what was new in popular culture. It had a guy bungee-jumping to pick a bottle of Thums Up when the adventure sport was barely known. In the early ’80s, it had women surfing, yachting and skydiving in another commercial. Later, it featured actor Akshay Kumar as a parkour practitioner (Yamakasi).
Importantly, however, its positioning sweet-spot (Taste The Thunder) was bolstered by an actually distinct—stronger, fizzier, and slightly spicier—taste that appealed to the Indian palate. This was probably the biggest reason for the success of Thums Up. A Coca-Cola executive says that Thums Up’s taste has a “masala” feel to it.
“It tingles, adds to the spicy food and not subtract from it. Little surprise then that in Andhra Pradesh and Telangana (states known for spicy cuisine) it has a whopping 65-70% market share,” he says. The brand is equally popular in UP, Bihar, Jharkhand, Gujarat and Maharashtra.
With the launch of Thums Up Charged, a caffeinated drink and first-ever brand extension for Thums Up, the company hopes to augment its market share and revenue from the brand. Actually, ever since Burn, launched in 2007, flopped, the company hasn’t had an energy drink in its portfolio. It is hoping that Thums Up Charged would occupy that space eventually. Clearly, the company is banking on Thums Up Charged and regular Thums Up—with women comprising 35% of its consumers—to reach the $1 billion mark in annual sales.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.