An unquenchable thirst

After a forgettable outing in the energy drinks space, Ramesh Chauhan is now trying to get back into soft drinks. Will he be lucky this time around?  

Life has come full circle for Ramesh Chauhan, chairman, Bisleri International, and creator of iconic brands such as Limca, Maaza and Thums Up. After exiting the carbonated beverages business by selling his portfolio to Coca-Cola in 1993, the industry veteran is heading back to his soft drink roots with his latest offering Bisleri Pop. However, Chauhan harbours no illusions about the mammoth task ahead of him: breaking into the Rs.20,000-crore carbonated beverages business, where business growth has been unimpressive. According to Euromonitor, the carbonated beverages category is estimated to grow at a CAGR of 5% between 2013 and 2018, compared with 18% for juices and 9% for sports and energy drinks. The category is also largely dominated by global giants. “Coke and Pepsi together control more than 95% of the market and have successfully prevented new entrants from capturing market share by employing huge marketing spends. Bisleri will find it difficult to break into this market,” says an industry expert. 

“The carbonated beverages category is going down. That is true,” admits Chauhan. “But I feel that consumers want variety. That is why all four flavours of Bisleri Pop are unique. People want change, something unique, and that is what we’re giving them,” he says. The four flavours — marketed under the tag line ‘Unlike Any Other’ — are Fonzo, a fizzy fruit drink; Limonata, a lemon-based drink; Spyci, a spiced cola drink; and PinaColada, a drink combining pineapple and coconut flavours. All these drinks are currently being marketed together as part of the Bisleri Pop family. The font and colour scheme used on the packaging seems inspired by Roy Lichtenstein’s ‘pop’ art, particularly his 1966 Newsweek cover. Chauhan is playing the price game this time around, having burnt his fingers in the past with Urzza, an energy drink launched in 2014 at a price point of Rs.50 that failed to take off among price-conscious consumers. Launched strategically just before the onset of the punishing Indian summer, all Pop flavours are priced at Rs.15 for a 300 ml PET bottle and Rs.20 for a 250 ml can. In comparison, Thums Up, India’s largest selling soft drink, is priced at Rs.14 for a 200 ml glass bottle and Rs.25 for a 250 ml PET bottle.  

“Bisleri Pop is a brand extension of Bisleri products beyond water. We felt that the mother brand testifying to the four branches of this new product would be helpful,” says Mohit Ahuja, senior vice-president, Soho Square, the agency that handles Bisleri Pop. This might just be the right strategy for the company, what with a Nielsen report claiming that FMCG brand extensions are five times more successful than new product launches in India. “Nielsen’s study of top brands in 46 FMCG categories and 82 brand extensions in food and non-food categories shows that in addition to promoting brand equity, brand extensions can grow incremental sales up to 38% and contribute as much as 30% to parent brand sales,” the report says. “With Spyci and Limonata, the aim was to give a slight differentiation from known benchmarks in the category. So, Limonata has the taste of raw lemon, while Spyci is cola with a twist. These products are Bisleri’s take on existing categories,” adds Ahuja. Fonzo and PinaColada are new products, combining two to three (synthetic) fruit flavours with fizz, a category that did not exist previously, explains Ahuja. While virtually unknown in India, pinacolada is popular internationally and is the national drink of Puerto Rico, an American dominion. Chauhan claims that pinacolada is selling the most among the four products.

Spreading the word
All of these drinks have been six to eight months in the making and Bisleri is taking it slow with their marketing, launching Pop only in big cities on a shoestring budget and gauging the reaction before committing more resources. The total distribution reach for Pop is around 40,000 outlets, compared with a total reach of 5 lakh outlets. “This may be a clichéd thing to say, but our audience is the youth. As of now, the strategy is very below-the-line: brands will be pushed through trade and online. There is no advertising above the line; we have a lot of digital and a little outdoor stuff. If one or two brands become really strong, we may consider marketing them separately,” says Ahuja. As part of its online push, Bisleri has also tied up with online grocery delivery service Grofers. “We are launching in a limited number of cities because we don’t have enough production capacity. We have a lot of capacity for Bisleri water, but these are carbonated drinks; it’s a different process. We don’t want to be diluting our sales effort because of lack of production,” explains Chauhan. Bisleri Pop is currently being manufactured at five locations, partly using the manufacturing capacity for Urzza, which has been temporarily discontinued. 

Retailers are also being incentivised with discounts: they are being given one bottle free for a carton of fifteen bottles. They also earn a 10% margin on every bottle they sell, at par with the margins soft drink majors offer. They say that the low pricing helps product sales, but that this advantage might be lost once the summer is over. “The product launch has been timed right, so people are buying for outdoor consumption because of the low price. This might not last once the summer is over. Also, 200 ml is too less to quench people’s thirst — 300 ml works better. So far, PinaColada has been the highest selling flavour, but the sales are nothing compared with Thums Up or Pepsi,” says a retailer based in Santacruz, Mumbai. Chauhan claims that the product has been selling faster than it is produced. “Strangely, and happily, there has been no need to push it to retailers — they are approaching us instead. There is a pull in the market, so we don’t need to push,” he says. 

Bisleri will also relaunch Urzza soon with revamped packaging and communication. “We realised that we had to justify the higher price [compared with soft drinks] to consumers by communicating our value proposition better in terms of product and imagery,” says Ahuja. Chauhan adds, “Every product you make should be unlike others, otherwise you will be a me-too player at a lower price,” he says, hinting at what he has learnt from the Urzza launch. While Chauhan doesn’t reveal any sales figures or targets for Pop, he says the larger intent behind this diversification is to reassert Bisleri’s presence as a brand and not commodity, given that the brand is synonymous with its product category, bottled water. “We want consumers to know that Bisleri is not just paani, it is also these other products,” he adds. The 77-year-old continues to be the uncrowned king of carbonated drinks in India, what with his creation — Thumps Up — continuing to lead in this category, dominated worldwide by Pepsi and Coke, years after he sold out. It might be too early to tell how the pecking order will change in times to come, but the fight is definitely getting fizzier.