Cola majors add new fizz to rivalry

Cola majors add new fizz to rivalry

Author | Source: The Economic Times | Thursday, Jul 06,2006 7:35 AM

Cola majors add new fizz to rivalry

The famous cola wars have found a new battleground - the Indian fields. The world's largest beverage company Coca-Cola, like its rival PepsiCo, is finalising plans for sourcing fruit from India for its juice brands.

“Coca-Cola India has shown interest in developing rural business hubs from where it can source fruits for its juice brands,” said an official from the panchayati raj ministry.

The ministry is the nodal agency for co-ordinating the development of rural business hubs (RBHs) across India to establish their linkages with corporates. “Coca-Cola India is likely to identify the hubs and would be helping the farmers with technological know-how and introduction of processing-friendly varieties of fruits,” the official added.

The company is learnt to be exploring different models for establishing the domestic fruit juice/pulp supply chain. A Coca-Cola India spokesperson refused to comment on the juice sourcing plans. “India largely has tableware variety of fruits. It took PepsiCo a couple of years' of groundwork to get the basics right. Coke could benefit from this, if it plays it right,” said an industry analyst.

The Coca-Cola move to get into agri business and corporate farming for sourcing juice comes four years after PespiCo's intentions of developing and introducing processing-friendly citrus fruit varieties in Punjab.

Working with the Punjab government, PepsiCo has already put up a processing plant and firmed up a contract farming model for citrus fruits . It is likely to start processing fruits (apart from citrus) and vegetables by year-end.

The juice plans of the cola majors comes at a time when the non-alcoholic carbonated drinks market is growing at low to mid single digits. This has forced both to focus on fruit juices, sports and energy drinks, which are growing at 30-40% in India.

PepsiCo has a significant brand position in the fruit juice segment through Tropicana. Besides, it has just introduced its international sports drinks brand - Gatorade - in the country.

Meanwhile, Coca-Cola India has already declared plans for entering the fortified fruit juice market in India by introducing the Minute Maid brand.

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