India on the brink of a beverage revolution, says Avinash Pant

The year has been anything but still for Coca Cola India’s still beverage business. With their premium energy drink Burn launched four months ago and the national launch of Nimbu Fresh, the firm is now also test marketing two other flavours under Minute Maid-Apple and Mixed fruit. The business consists of juices (Maaza, Minute Maid Pulpy Orange, Nimbu Fresh), Kinley packaged water and soda, and premium energy drink Burn.
The juice market, in terms of volume, has a market size of 660 million unit cases, of which, packaged juice accounts for just 90 million unit cases. So the beverage major is eyeing the potential of unpackaged juice market for conversion. Avinash Pant, director-marketing, still beverages, Coca-Cola India, spoke to DNA about opportunities in the still beverages segment, distribution expansion and the response Burn has fetched. Excerpts:

You’ve recently started rolling out Minute Maid Nimbu Fresh nationally. What about the national launch of the other flavours — Apple and Mixed fruit?
Nimbu Fresh is our big national launch this year. It’s a phenomenal initiative, because if you look at unpackaged juices segment in India, almost 50% of it is nimbu-paani (lemon drink). Our entire marketing for Nimbu Fresh is pegged on the ‘ghar jaisa (homemade)’ experience. It is present in almost all markets now and we are receiving acclaim for both, its marketing and the product. The two other flavours of Minute Maid, piloted in Kolkata — Apple and the Mixed Fruit, are also getting encouraging responses. We will keep it on pilot for at least 3-6 months. We are expanding our whole range under Minute Maid.

What is the plan for Minute Maid? Where do you see it going in terms of new flavours?
For The Coca Cola Company, Minute Maid is the global strong juice brand. All our offerings in juice are under Minute Maid. When you look at it from the Indian perspective, there is Maaza, a phenomenally strong brand and clearly the leader in the mango drink segment. You don’t just look at a category from the manufacturer’s perspective, even as a consumer, you have a rationale for choosing a particular drink. Be it to quench thirst, nourishment, for fun... so different categories and products fit into those needs. We keep evaluating what is sizeable and important to consumers and look at opportunities in expanding the juices portfolio. If we find any segment where there is significant consumer need, we will definitely bring out an offering in that space.

How do you see your non-carbonated drinks portfolio
growing?
If you look at sheer opportunity across categories in beverages (including packaged water), only about 4% of beverages that people in India consume is packaged. There is incredible opportunity across categories, be it still or sparkling.  There have been initiatives happening in still category, because we have not had so many offerings earlier. India is on the brink of a beverage revolution. China is a little ahead of us in consumption. Two years ago, only 10% of juices consumed in India were packaged. That number has gone up to 16-17% today.

What is the current status of your energy drink brand Burn?
Burn has been in the market for 4 months and is talking to a very specific audience. It is targeted at young adults. The marketing approach for Burn is distinctive. We are focused on areas of experiential sampling and community marketing. You identify things that connect with your brand. We did the Burn Curate initiative, where we went to design colleges in Mumbai and Delhi and gave them an opportunity to design an outfit of only Burn cans. We are now starting work in the music space. We have identified clubbing and electronic music as the areas to target. The team is working with select outlets in the night channel of Mumbai, Delhi and Bangalore. We will expand, but first focus on further expansion in these three cities. Burn is currently at parity with existing energy drink brands at a price point of Rs 75 per can.

What is the scope of distribution expansion vis-a-vis the beverages universe available today?
In the beverage universe there is significant need for sales generating assets or cold-drink equipments such as coolers. There definitely is potential for further expansion. Our beverages are retailed out of about 1.5 million outlets across the country, but if you look at FMCG as a broader category, there is room for us to expand. There is a lot of effort that goes into opening a new outlet and putting coolers in the market.

What are Coca-Cola’s investment plans in the near future?
Coca-Cola has so far invested over $1.2 billion. In 2006, it announced another round of investments of about $250 million to be made over the next couple of years and is on track. India is an important market for us and we need to make it big.

How is Kinley (packaged water brand) doing?
Kinley is growing well. We re-launched the brand about two years ago and got a good response. It is an important category and definitely necessitates capacity expansion. Kinley Soda is a prominent player in the soda segment. As per the beverage industry estimates, the packaged water segment is worth Rs 1,400 crore and Kinley’s market share is 10% of it.

How is modern trade doing for you in terms of sales
contribution?
Modern trade in India, compared to the west, is very small, maybe 5% of total retail in India. But we know it is going to become significant. In juices, for example, modern trade plays a huge role for the sheer options it can offer. When we rolled out Nimbu Fresh, we had a strong tie-up with Big Bazaar across their 180 stores for a pre-launch. So before it came anywhere else, it was available at their outlets. They were equally excited about it. Modern trade contribution to our sales is in the range of 5-6%, and will grow going forward.