Rs 20 Coca-Cola bottles: Reliance's Campa perhaps changing the game

Coca-Cola plans to reduce the price of its 400 ml PET bottles from Rs 25 to Rs 20, ToI reported citing distributor sources. This change is expected to take effect within a week in Southern regions such as Tamil Nadu, Karnataka, and Kerala. Coca-Cola has not commented on the matter.

"Since the company has been selling the 400 ml PET bottles for Rs 25, they cannot suddenly change the packaging of the same bottles and mark the price as Rs 20. For attracting customers, they will launch a new packaging wherein they will market the bottles as 250 ml and 150 ml free (250 ml + 150 ml free will be written on the pack) and the MRP will be Rs 20," sources told ToI.

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This pricing adjustment coincides with Campa Cola's expansion strategy, which involves offering lower prices. Owned by Reliance Industries, Campa Cola has priced its products significantly lower, prompting Coca-Cola to revisit its pricing. For example, Campa Cola's 500 ml PET bottles are available for Rs 20, whereas Coca-Cola sells its 400 ml bottles for Rs 25. Similarly, Campa Cola’s 600 ml bottles are sold for Rs 30, while Coca-Cola’s 600 ml bottles cost Rs 40.

Coca-Cola markets various pack sizes of PET bottles including 250 ml, 400 ml, 600 ml, 1 litre, and 2.25 litre through general trade channels. In modern trade, they offer different sizes like 750 ml and 1.25 litre. Presently, Coca-Cola distributors are managing existing stocks of 250 ml bottles priced at Rs 20, which must be sold before the new 400 ml bottles with lower prices are introduced.

For the larger 2-litre bottles, Campa is priced Rs 20 less than Coca-Cola's 2.25-litre bottles. Coca-Cola primarily distributes 250 ml, 400 ml, 600 ml, 1-litre, and 2.25-litre PET bottles through general trade channels.

Coca-Cola distributors are concerned as they currently hold substantial stock of 250 ml bottles priced at Rs 20, which must be cleared before the new, lower-priced 400 ml bottles reach the market. The company’s future pricing and marketing strategy for the 250 ml bottles remains uncertain. “The 250 ml stock will need to be liquidated,” said the distributors.

Tata Consumer Products managing director Sunil D’Souza had earlier pointed out that Reliance’s pricing strategy with Campa Cola has created a major shake-up in the market. Reliance-owned Campa Cola has disrupted the beverages market by offering a significantly higher margin to retailers on its ₹10 pack, forcing other players to reset their pricing, D'Souza said in a call with analysts.

Reliance's disruption strategy goes beyond just pricing. The company is banking on a broader appeal, leveraging the nostalgia associated with Campa Cola, which was popular in India in the 1970s and 80s before being edged out by American giants Coca-Cola and PepsiCo in the 1990s. After acquiring the Campa Cola brand for Rs 22 crore last year from Pure Drinks Group, Reliance has positioned the product as a national challenger with local roots, appealing to nationalist sentiments.

(With ToI inputs)