HLL, Pepsi rework Lipton alliance

HLL, Pepsi rework Lipton alliance

Author | Source: The Economic Times | Tuesday, Apr 25,2006 6:06 AM

HLL, Pepsi rework Lipton alliance

The Hindustan Lever-Pepsi alliance for the ready-to-drink Lipton iced tea is returning to the drawing board as the hot cuppa's mesmerising hold over the domestic consumers continues. The alliance, which rolled into the domestic urban market with returnable glass bottles (RGBs) as the main stay, has met with a lacklustre response.

The combine, part of an international beverage JV selling iced tea and other tea based beverages, has scaled down the presence of 250 ml RGBs priced at Rs 9 as it looks for viable delivery models to make a dent into the market.

It is also expected to shed its reliance on the spread of general retailing. Instead, HLL and Pepsi are likely to bank on modern retail and out-of-home kiosks targeting the experimentative and specific urban consumers reckoning the fact that 'winning over taste buds will be a long haul'.

While hitting the market last year, HLL and Pepsi had projected that iced tea would account for 10% of the Rs 6,000-crore soft drinks market. However, both partners still retain belief in the improving fortunes of iced tea business just as it happened in China in recent years.

The alliance, which rides on HLL's marketing prowess and Pepsi's distribution might, is in the midst of rolling out 500 ml PET packs and cans (priced at Rs 20) besides the existing one-litre tetrapacks. However, the official said there was no plan to exit the RGB category completely.

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