Since last few months, there has been intense speculation in the $60 billion Indian carbonated drinks market regarding which brand leads it. Brand Thums up was the boss, which held rank #1 since last 30 years with current 15.3% market reach.
Sprite which is the #1 soft drink brand in China, was born in the year 1961 in USA when it was felt necessary to counter the dominance of 7Up. It made its entry inside India in the year 1999, and within 10 years, it was able to topple Pepsi. Sprite became #2 most popular soft drink brand in the year 2009, when it pushed Pepsi to rank #3.
However, since last three months, Sprite was able to grab 15.6% market share; thereby overtaking Thums Up and becoming India’s largest selling soft drink brand.
Both Thums Up and Sprite brands are owned by Coca Cola. Parle brothers sold their flagship brand Thums Up (which had 85% market share) to Coca Cola in the year 1993. Here are some possible reasons, which help us, understand why Sprite was able to beat Thums Up and become India’s largest selling soft drink:
Cola taste is acquired, Lemon is natural
Lemon is quite common in Indian households. The taste of lemon comes naturally to us. But cola is different. Many associate cola (either Pepsi or Coke) as ‘Western’ only because of its taste. Cola companies spend billions of dollars on advertisements & endorsements so that we remember its taste and consumption never stops. It was researched that if cola companies stop their advertisements and endorsing celebrities, then people will actually forget them. As the lemon’s taste is already in our gene pool, brands such as Sprite and Mountain Dew don’t have to try too hard to sell their units to us.
Only chilled Cola tastes good
Indian rural population is now aware of taste and brand. Consumption growth in rural areas is increasing at faster pace compared to urban locations. But the major hindrance in selling soft drinks in villages is electricity and refrigeration.
Unless a Pepsi or a Coke is chilled, it won’t taste good and hence, it won’t sell. But it is different with lemon based soft drinks. Even it is not chilled, Sprite or Mountain Dew will taste good, and it will sell.
Marketing of Sprite in India is mainly based on creating cheeky, viral videos based on a particular theme; often hitting back at Mountain Dew as well. Their current campaign “Chalo Apni Chaal”, is a perfect example of such type of marketing.
They never sign expensive endorsement deals with celebrities unlike Thums Up, which has endorsed the most expensive Bollywood actor today: Salman Khan. Earlier, they had roped in Akshay Kumar as well.
Leveraging its position
Ever since Sprite entered India, it is witnessing spectacular growth. In the year 2003, that is 4 years after Sprit’s launch, Pepsi introduced Mountain Dew in India, and it became a hit as well. In fact, both Sprite and Mountain Dew are the fastest growing soft drink brands in India.
Market was aware that sooner or later, Sprite will overtake Thums Up, and the tipping point was just breached. Sprite brand was brilliantly managed and marketed, which brings us to the last point:
The Distribution Network
Coca Cola is the largest soft drink company in the whole world, and its dominance in India is no different. Being the market leader, it has developed an excellent distribution network which goes deep inside the rural India as well.
In the year 2002, Sanjeev Gupta, Deputy President Coca-Cola India told, “We want to be the Hindustan Lever of the Indian beverage business.” And they have truly achieved that. There are several case studies and presentations which highlight this fact. Sprite definitely took advantage of this strategically important asset and today, it is the largest selling soft drink in India.
These are our observations and point of view related to this big transformation which occurred inside Indian carbonated drinks market. Which is your favorite soft drink? Do you have any insights or view regarding this success story of Sprite? Do share your views in the comments!