Akanksha Nagar, Financial Express
September 5, 2022

Can you give a brand a second shot at life?

Reliance Retail Ventures certainly thinks so. It has acquired Campa-Cola for an estimated `22 crore from Delhi-based Pure Drinks Group on the assumption that it will not only be able to revive the five-decade-old brand but can also use it to springboard into the dog-eat-dog soft drink market in India.

It will not be a cakewalk surely. The ones who were fans of the brand—which was launched in the 70s—have moved on, and younger customers have little or no association with the brand.

Samit Sinha, managing partner, Alchemist Brand Consulting, believes that Reliance must have been very keen on getting into the soft drinks category as a part of its overall strategy of retail expansion. In any case, it hasn’t had to shell out a bomb for the brand so it is a less audacious gambit than starting from scratch. There is one other factor that might work in its favour—which is the formula, the taste of which had near widespread acceptance in its heyday.

Sandeep Goyal, managing director, Rediffusion Brand Solutions, who is handling a similar resurrection of Garden Vareli sarees, says giving an old brand like Campa-Cola a new life will be far from easy—the Campa-Cola generation is now in their sixties and therefore there is very little monetisable value in the nostalgia.

Launch versus resurrect

From the looks of it, Campa-Cola will have to fight sip for sip, bottle for bottle.

Rohit Ohri, chairman and CEO, FCB Group India, who had managed the Pepsi account for more than a decade, says it will be difficult for a new brand to find space in a market dominated by multinationals like Pepsi and Coke. While the residual equity can help get the foothold, the real challenge would be to woo a younger consumer set.

Naresh Gupta, co-founder and CSO, Bang In The Middle, concurs: “When you try to resurrect a brand, you do it knowing that the brand isn’t doing well or has been out of circulation. That is big baggage for the brand to wipe out. Often the residual awareness and following are limited to the audience that is less likely to be your core audience today.”

There is also the fact that young people in the metros are moving away from colas, preferring healthier drinks or niche artisanal products instead. At the same time, soft drink is an impulse category and needs a large dose of salience to fly off the shelf.

Gupta says Reliance can try and build on the Indian-ness that Campa-Cola exudes. His guess is the old brand will be used as a calling card in trade and there would be a host of new launches that build upon it. “Campa-Cola may fuel a lot more fresh fizzy drinks launch from Reliance,” he adds.

That said, just the sheer time an old brand has spent on the shop-shelves would give Campa-Cola an edge over any new brand that its current owner might want to launch. An old brand can appear to be proven, experienced and secure, while a new brand could be seen as untested, raw, and risky. An old brand may have had a positive relationship with the consumer but may have been dormant due to strategic or operational reasons. In such a case, reviving the brand is clearly a good idea, says Devangshu Dutta, chief executive, Third Eyesight.

Reliance could have launched a new brand but if the existing brand has residual awareness or connection, it could be the pivot around which other brand properties can be built. Here, the new owner also has the benefit of having a wide retail network. As on March 31, 2022, Reliance Retail operated 15,196 stores across 7,000-plus cities with a retail area of over 41.6 million sq ft. This, if nothing else, will give Campa-Cola a start any new brand will die for.

(Published in Financial Express)

Written by Christina Moniz

Retail chains are on an expansion spree, riding on growing demand from a young consumer cohort

Just about a month back, Wagh Bakri Tea Group, the third largest packaged tea company in India with a turnover of over `1,500 crore, opened its 15th tea lounge in Noida’s upscale DLF Mall of India.

A little over two years ago, Chaayos’ physical footprint was 75 outlets across the country. Currently, its store count is 200.

Just about a month back, Wagh Bakri Tea Group, the third largest packaged tea company in India with a turnover of over `1,500 crore, opened its 15th tea lounge in Noida’s upscale DLF Mall of India.

A little over two years ago, Chaayos’ physical footprint was 75 outlets across the country. Currently, its store count is 200.

Get the drift?

Today the humble cuppa is much bigger than an excuse for roadside tittle-tattle. The rash of tea lounges and bars have taken what used to be, at its best, a social lubricant, and turned it into a `700-crore market.

Homegrown tea café chains have been quick to cash in on the out-of-home demand from a young consumer cohort, offering snacks, groovy ambience and even free wi-fi connectivity. Chains such as Chaayos, Chai Point and Wagh Bakri’s Tea Lounge are ramping up their offerings to cater to a segment for whom coffee shops were the default hang-out zone. Up until now.

But how sustainable are they, given that 80% of the tea drinking market is unorganised? Pramod Damodaran, CEO, Wagh Bakri Tea Lounge, says brands in this segment are catering to the “need state of the consumer”, whether it is meetings,family outings, a quick rest after shopping at the mall or a quiet moment in airports, offices or hospitals. “We elevate the tea drinking experience and make it premium, almost akin to how tea drinkers in the past would enjoy their tea at fancy hotels, but we offer the experience at affordable prices,” he says. While coffee chains offer muffins and croissants with their beverages, Wagh Bakri pairs its teas with pakoras, samosas and vada pav, which resonate more with the average Indian consumer.

Growing the market

Nitin Saluja, founder, Chaayos, draws parallels with global coffee brand, Starbucks. “Before Starbucks launched in the US, there were very few good quality coffee retail outlets. In the Indian context, before chai cafes were launched, consumers could barely enjoy a good cup of tea in a hygienic retail space outside their homes,” he says.

The pandemic, too, played its part in getting consumers to choose hygienic options. That is why home delivery, which was 20% of Chaayos’ revenue prior to the pandemic, now hovers around 30-35%.

The success of chai chains is a reflection of evolving consumer preferences. Saluja says despite the presence of huge international and homegrown brands in the coffee retail segment, the category earns an annual revenue of around 1,500 crore. “In comparison, there are only 3-4 homegrown chai café players, but their combined annual revenue is around700 crore. Only chai retail chains in India can replicate the success of coffee chains in the West,” he says.

Damodaran says his chain is not competing with coffee chains but rather catering to the growing need for cafes. It is for this reason that the brand also offers coffee across its outlets. Wagh Bakri has 15 tea lounges and 10 tea kiosks (Tea World) across Maharashtra, Gujarat and Delhi NCR but plans to ramp up its footprint in the North, West and South over the next three years.

“The industry can ensure long-term health only by capturing the value offered by out-of-home consumption in modern branded formats, packaged branded sales in modern retail and direct-to-consumer models,” sums up Devangshu Dutta, CEO, Third Eyesight.

Source: financialexpress