Reliance‘s Campa Cola is set to disrupt the beverage market with its aggressive pricing strategy, mirroring the impact of Jio’s entry into the telecom sector. By pricing its 200ml bottles at INR 10, Campa Cola is significantly undercutting established players PepsiCo and Coca-Cola, which charge INR 20 for 250ml PET bottles. This bold move has left the beverage giants on high alert.
Campa Cola has launched a pricing offensive, undercutting Coca-Cola and PepsiCo by INR 10-20 across most pack sizes. While the beverage giants have yet to match Campa Cola’s reduced rates, they are employing alternative strategies to stay competitive, according to distributors in South and East India.
To counter Campa Cola’s aggressive pricing, Coca-Cola is offering higher margins to retailers in select markets, such as Kerala, as an incentive to promote their products.
In response to Campa Cola’s market entry, Coca-Cola has increased retailer margins in Kerala, particularly ahead of Onam. This strategic move boosts retailers’ earnings, as the margin is the difference between their purchase price and the selling price to consumers.
“Retailers will only promote those brands for which they get good margins. Usually, Coca-Cola used to offer 2.5-litre bottles (MRP is INR 100) to retailers at INR 75. But this time, before Onam, they reduced it to INR 65. This seems to be due to the entry of Campa in the market.” A Coca-Cola distributor in Kerala revealed
PepsiCo is considering introducing lower-priced packs to counter Campa Cola’s aggressive pricing, according to a distributor. This strategy was hinted at by Varun Beverages, PepsiCo’s India bottling partner, during a recent earnings call. The company indicated that if market conditions demand, they will launch a range of products specifically designed to compete with Campa’s pricing.
Distributors reveal that Reliance is replicating its successful Jio strategy for Campa, stating, “Reliance is carrying out vigorous promotional activities on the ground for Campa and aggressively trying to get distributors. They want to do the same thing they did with Jio.” Despite queries, Coca-Cola and Reliance remained silent, while PepsiCo declined to comment. Campa is flooding Eastern markets, such as Kolkata, with marketing efforts and distributor incentives. Specifically, Campa is focusing on price-sensitive areas in the East to establish a strong presence.
According to a Coca-Cola distributor in the Eastern region, Campa’s competitive pricing is yielding results, with Coca-Cola and Pepsi losing market share in West Bengal. “The price points of Campa are making an impact on the ground. Coca-Cola and Pepsi have lost some market share in West Bengal. Our estimates suggest that Campa has gained a 2% market share in the non-alcoholic beverage segment in the region,” the distributor noted. However, the distributor expressed skepticism about Campa’s long-term sustainability, questioning whether the brand can maintain its aggressive pricing strategy over time.
Campa Cola – A Brief Background
Campa Cola was the soft drink market leader in the late 1970s and 1980s across India. The company entered the market when the then Morarji Desai government expelled Coca-Cola from the market for not sharing its secret formula. At that time Coca-Cola was manufactured in India by the Pure Drinks Group which was owned by Charanjit Singh. When Coca-Cola brand was kicked out from the Indian market, Singh started Campa Cola in 1977 to save the day for over 2800 employees.
In the late 1980s when Manmohan Singh introduced economic reforms, Coca-Cola re-entered the Indian market, and Pepsi on the other hand negatively impacted the market share of Campa Cola. Over time, the brand size shrunk and stayed limited to some cities of Haryana.
Other North Indian states including Delhi saw little sales of Campa Cola along with new small brands such as Thunder Blast during the 2014 Gaza Massacre as the American companies were witnessing global boycotts on grounds of alleged pooling of funds to Israel.
In August 2022, Reliance Industries Limited acquired Campa Cola for INR 22 crores from Pure Drinks Group. Reliance announced plans in 2023 to resurrect the iconic brand that once dominated India’s beverage market till 1980s. The move aims to challenge the stronghold of Pepsi and Coca-Cola, as well as local favorites in the juice drinks segment.
However, the brand didn’t witness demand initially as the soft drinks category is notoriously difficult to crack, with multinational giants like Pepsi Cola and Coca-Cola having established a strong foothold. These companies have spent years building an extensive distribution network, with Coca-Cola boasting a presence in nearly 4 million retail outlets across India.
Despite initial skepticism, Campa has made significant strides, leveraging its ‘Apna thanda‘ appeal and Reliance’s vast distribution network. It is assumed that the latest boycotts of American companies amid Israel-Palestine Conflict 2023-24 have added to Campa’s reputation as an alternative to Coca-Cola and Pepsi in India.
It is worth noting that Reliance has a reputation for disrupting industries with bold moves that transform the market landscape. The company’s foray into the telecom sector with Jio is a prime example. By offering unprecedented low-cost data plans and free voice calls, Reliance Jio revolutionized the mobile market, significantly reducing costs for consumers. This move led to a remarkable increase in data consumption and internet penetration across India, with Jio now leading the market with an estimated 40% share, according to Telecom TV (Apr 15, 24).
