New Delhi: Coca-Cola India Pvt. Ltd on Thursday introduced the Minute Maid Vitingo, a water soluble powder priced at Rs5 per sachet, reviving a popular yet controversial price point that it discontinued 14 years ago. The purpose: get more people to try Coca-Cola products.
In 2000, the Indian unit of American beverages maker The Coca-Cola Co. had introduced Rs5 bottles of Coca-Cola, which was followed by rival PepsiCo with its own beverage at the same price. Coca-Cola ended the Rs5 bottles in 2004.
“The Rs5 price point will increase our reach, especially to the segment which cannot afford most of the packaged beverages. Nutrition is a category we would be focusing on in future. The aim is to bring products that have connects with the country’s socio-economic needs. And Vitingo fits in perfectly," said T. Krishnakumar, president, Coca-Cola India and South-west Asia.
Coca-Cola’s Vitingo will have to compete with dominant Glucon-D, a similar product by American food firm The Kraft Heinz Co. and home-grown packaged goods maker Dabur India Ltd’s Glucose-D, among others.
“Chemist outlets would be one of the most important distribution channels for Vitingo. We have almost no presence there. We have partnered with wholesaler Metro Cash and Carry that has a strong presence in that segment. We’ll have more partners," Krishnakumar said.
Vitingo, however, is not an entirely new product. The company has been distributing it as part of its corporate social responsibility initiatives through non-governmental organisations since 2010.
“That model had limitations. Now, we want to make Vitingo a purposeful commercial venture. With scale, we’ll make little money even at Rs5," added Krishnakumar.
In its previous Rs5 avatar, Coca-Cola fulfilled its purpose by getting a lot more people to try its beverages in packaged glass bottles, especially across rural India. The industry followed suit.
However, Krishnakumar said, the company has no plans of selling more products at Rs5.
“More than 70% of packaged beverages sold in India are at Rs20. We already have some options, and we’ll have more in future at Rs10," added Krishnakumar.
At Rs10, the company sells Aquarius Glucocharge, a packaged drink the company calls ‘enhanced hydration’, tetra packs of Minute Maid and Maaza.
Besides, the company sells its aerated drinks at Rs10 through 45,000 splash bars (portable dispensing units) across smaller towns. “We’ll increase this as well," he said.
Krishnakumar said that Coca-Cola is taking a bet on Aquarius. “At Rs10, Aquarius alone is expected to get 5-7% more consumers to Coca-Cola’s reach in the foreseeable future," he added.
Coca-Cola is also planning to re-enter dairy by end of this year. The company had entered the segment with Vio ready-to-drink flavoured milk in 2016 which did not have much of a presence.
“We have learnt some lessons. We are working on a few products and preparing for a re-entry," Krishnakumar said.
Its rival PepsiCo India Holdings Pvt. Ltd, the local unit of PepsiCo Inc., had entered the market in March 2017 with Quaker Oats ready-to-drink milk with limited distribution.
India’s estimated Rs80,000-90,000 crore dairy market has always proved to be tough for multinational companies to crack.
In January, French dairy firm Danone SA exited the market after three failed attempts. The market is dominated by co-operatives such as the Gujarat Cooperative Milk Marketing Federation Ltd that owns the Amul brand.