BackCoca-Cola, PepsiCo to launch more fizzy fruit drinks
Coca-Cola and PepsiCo will launch more juice-based aerated beverages next year following the guidelines of the Food Safety and Standards Authority of India
Premium
New Delhi: Coca-Cola India will launch a few more non-cola aerated beverages with fruit juices next year if the country’s food regulator, Food Safety and Standards Authority of India (FSSAI), finalizes guidelines for the category, said Venkatesh Kini, president, Coca-Cola (India and south-west Asia).
The local entity of the American beverages company, The Coca-Cola Co., now sells only one such product in India—Fanta Green Mango, a carbonated beverage that has 10.4% fruit content.
Rival PepsiCo India Holdings Pvt. Ltd, the local arm of American food and beverages company PepsiCo Inc, which sells Nimbooz Masala Soda, a juice-based (5% lemon juice) aerated beverage, is also working on new products in the category.
“Over the past few years, we have been working to expand our beverage portfolio and the initiative to bring in more offerings with fruit juice in carbonated drinks is in line with this strategy," said a spokesperson at PepsiCo India, in an e-mailed reply.
Coca-Cola India started piloting the product at start of the year—more than a year after Prime Minister Narendra Modi urged multinational carbonated beverages companies like Coca-Cola and PepsiCo to mix natural fruit juice (at least 5%) in aerated beverages to help augment fruit sales for Indian farmers.
“Millions of people buy Pepsi and Coke. I have asked these companies if they can put 5% natural juice in their drinks," Modi had said in September 2014.
PepsiCo, on the other hand, launched Nimbooz Masala Soda nationally in the summer of 2015.
“We are waiting for the guidelines. The industry is working with FSSAI on this. The draft of the guidelines is already in circulation. Once we have the final guidelines, we’ll be able to decide on such products. We are definitely working on this platform. These will be developed and sold in India," Kini said, declining to reveal details on which brands would have the products.
“We are committed to indigenizing our fruit-sourcing footprint in India and helping drive forward the government’s agenda of blending fruit juice in carbonated drinks. As part of the industry, we have been working with FSSAI to introduce enabling standards for carbonated fruit beverages. The draft of such standards has already been circulated by FSSAI. We also look forward to a conducive tax rate that will help give greater impetus to industry to innovate, thereby unlocking the potential of this category," said the PepsiCo India spokesperson.
At present, FSSAI guidelines on aerated beverages do not define carbonated fruit beverages and there are no standards that the industry can follow. Last month, the food regulator released a draft notification, defining ‘carbonated fruit beverages or carbonated fruit drinks’. Juice content in these beverages will be below 10% but not less than 5% (in case of lime and lemon juice, it should be above 2.5%). The regulator has sought views from industry within two months.
Cola companies have, in recent years, seen sales of aerated beverages being impacted as offtake of juices and fruit-based drinks has grown at a brisk pace. In 2015, juices saw a volume growth of 20.06% and a value growth of 25.78% over the previous year. Fizzy drinks, in the same period, grew 8.42% by volume and 10.82% by value, according to market research firm Euromonitor International.
Earlier this month, home-grown Dabur India Ltd announced its entry into the fizzy drinks market by launching a range of fruit juice-based aerated drinks under the brand—Réal VOLO, priced at ₹ 40 for 250ml cans. It has 20-25% fruit juice content, Dabur said in a statement.
“Today’s health-conscious consumers prefer healthier beverage options. We have been witnessing an increase in consumer demand for ready-to-drink beverages that are aerated but not unhealthy. With Réal VOLO, we are meeting this consumer demand with a range of fizzy fruit drinks that retain the goodness of the fruits and come without the guilt of unhealthy consumption," Mayank Kumar, category head (fruit juices) at Dabur India, said.
“We think that it will not be an easy job for Dabur to crack this market where already biggies like Pepsi, Coca-Cola and Parle operate. Bisleri also entered the carbonated drink segment with the brand Bisleri Pop and with an attractive price point of ₹ 20 for a 250ml pack. However, the good thing for Dabur is that the product has been launched under the brand name ‘Real’ which is positioned as a healthy product… There can be a shift of consumers happening from the current users in the carbonated drink space to a little healthier option," Abneesh Roy, analyst with Edelweiss Securities Ltd, said in a note.
Mumbai-based Parle Agro Pvt. Ltd sells Appy Fizz.
In February, Bisleri International launched Bisleri Pop, an aerated fruit-based drink, to re-enter the carbonated beverages market that it exited in 1993 after its promoter Ramesh Chauhan sold five popular brands—Thums Up, Limca, Gold Spot, Maaza and Citra— to Coca-Cola. Both parties had entered into a non-compete agreement, which expired in 2008.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
