Eye on volumes, Coca-Cola to revive Citra after 19 years

13 Feb,2012

By Ratna Bhushan


Coca-Cola will revive Citra, a clear-lime drink it bought from Ramesh Chauhan two decades ago but junked in favour of Sprite, in a move that analysts believe is more to target price-sensitive consumer segments than to unlock the brand’s heritage value.


A person familiar with the top beverages maker’s plans said Citra will be priced about 20 per cent cheaper than existing lime-lemon drinks such as its own brands Sprite and Limca as well as PepsiCo’s Mountain Dew and 7 Up, to target a wider audience and take on smaller brands.


A Coca-Cola spokesman confirmed the company is introducing Citra in “a few towns in Maharashtra and Gujarat” on a pilot basis. This will be followed by a staggered launch across other metros and bigger cities.


The move has surprised industry watchers because Coca-Cola’s Sprite, the second-largest soft drink brand in the country after Thums Up, leads the lime-lemon drinks segment, which is the fastest-growing soft drink category in India’s Rs13,000-crore fizzy drinks market.


Among those surprised is Ramesh Chauhan, who created brand Citra and made it popular in the late 1980s and early 1990s.


“After keeping the brand in cold storage for so many years, it’s strange they want to re-introduce it now, especially when they have a strong presence in the clear-lime segment,” Chauhan said. “If they are looking for retention and heritage value, then logically even Gold Spot should be revived.”


When Coca-Cola re-entered India in 1993, it bought out all Parle brands except Bisleri from Chauhan.


Move aimed at mopping up volumes

While Citra and Gold Spot were phased out to make way for Coca-Cola’s global brands Sprite and Fanta, respectively, Thums Up, Limca and Maaza were retained. Shashi Kalathil, CEO of management advisory firm Y-factor and partner at private equity fund Exponentia Capital, said the move may be aimed at mopping up volumes. “Coca-Cola probably doesn’t want Citra’s pricing to impact its larger brands. So this could be more of a pricing game and about treating Citra more as a trademark than a brand,” he said.


Parle brand again

It’s history that the US major sidelined Parle’s cola brand Thums Up to promote its own brand Coca-Cola for years before waking up to the potential of the Indian brand and backing it.


Now it seems like deja vu for Coca-Cola as it is banking on a Parle brand once again to push market share in the lime segment. The Coca-Cola spokesman said Citra would not cannibalise its existing lemon drinks because there is ample room for multiple brands in a developing segment like sparkling fizzy drink in a high-potential market such as India.


Devendra Chawla, president of food & FMCG segments at the country’s largest retailer Future Group, said the move will aid the growth of the clear-lime category, which is already seeing heightened brand activity. “To grow carbonated soft drinks’ per capita in India, apart from growing colas, it’s critical to activate flavours which have natural acceptance from Indian consumers such as lime and mango,” said Chawla, who formerly worked with Coca-Cola.


India’s per capita consumption of carbonated drinks is just 11 litres a year compared to 34 litres in China and 675 litres in Mexico.


The lime-lemon category in India has been growing 16-17 per cent a year, ahead of colas at about 11-12 per cent and orange drinks at 8-9 per cent. Apart from being a familiar flavour that Indians consume at home (in the form of nimbu paani), lime-lemon drinks are considered ideal thirst quenchers.


Both Coca-Cola and PepsiCo have been promoting their brands aggressively in this segment. PepsiCo has Bollywood star Salman Khan endorsing Mountain Dew and actor Sharman Joshi for 7 Up, while Coca-Cola pushes clear-lime drink Sprite and cloudy lemon drink Limca on the irreverent and freshness platforms, respectively.


Source:The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

Post a Comment 

Comments are closed.