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March 25, 2023
Nivedita Jayaram Pawar, Moneycontrol
March 25, 2023
Campa Cola, that much-loved soft drink from the ’70s and ’80s, is set to return to supermarket shelves this summer. Mukesh Ambani’s newly floated FMCG flagship Reliance Consumer Products (RCP) bought the brand from its makers Pure Drinks in August last year, reportedly for Rs 22 crore. The cola will be re-launched in a new contemporised avatar this summer. Campa Cola, Campa Lemon and Campa Orange will be rolled out in phases starting with Andhra Pradesh and Telangana and then across the country. The company is on a drive to acquire and promote homegrown Indian brands with a deep-rooted connect with Indian consumers. RCP has also acquired a 50 percent stake in the 100-year-old legacy brand Sosyo from Hajoori Beverages Pvt. Ltd this January. Lotus Chocolate from the Pai family, Sri Lanka’s leading biscuit brand Maliban and its own JoyLand confectionery, and Independence and Good Life food brands are other important pieces of its portfolio.
The back story
Coca-Cola entered India in the 1950s but made a hasty retreat two decades later when the Indian government introduced a regulation that would have required it to reveal its formula. Interestingly, it was the Pure Drinks Group that first introduced Coca-Cola in India in 1949, and was its sole licensed manufacturer and distributor. The Group which also owns the Le Méridien hotel in Delhi, decided to launch its own cola in the market after the unexpected and overnight exit of Coca-Cola from India. Since the company already had the expertise and the infrastructure — 12 bottling plants, plus manpower in excess of 10,000 — this seemed the natural thing to do. Pepsi had not yet arrived and the only other competition was the state-owned Double Seven and Thums Up owned by Ramesh Chauhan’s Parle Bisleri.
Campa which promised “The Great Indian Taste” was launched using locally developed concentrate in three flavours — cola, orange and lemon. Though apple and jeera flavours were added later, cola made up almost 80 percent of the product mix. In the 15 years that followed Campa went on to rule the Indian soft drinks market. It even used the same Coca-Cola font. During its heyday, it was manufactured in over 50 factories across the country, including four in Delhi. However, Campa started to lose its fizz by the mid-’90s, when Coca-Cola returned and homegrown Thums Up started gaining ground. It gradually disappeared from stalls and shelves across the country. Production of the drink at the Delhi factory stopped in 1999. The heroic comeback of the ‘Made in India’ brand after more than three decades is making many Indians nostalgic. And the fact that it’s backed by a home grown conglomerate is only adding to the excitement.
Will nationalism and nostalgia alone suffice to throttle the strong base, aggressive marketing campaign and sprawling distribution network created by Coca Cola and Pepsi? Experts feel that nostalgia will definitely drive people to try the cola especially since its challenging international giants in the segment. But it will take a lot more than that believes Devangshu Dutta, founder of retail consulting firm Third Eyesight. “Though the brand has some latent awareness, it’s with a different segment — people in the late 40s and upwards. But the consumption pattern is driven by a younger profile. So Reliance will have to build the awareness and the stickiness for the product with the segment. And that’s a hard piece of work which is why I believe they have brought in the tried and tested tactic that they use — price wars. They have launched it at a price which has forced the incumbent two international brands to lower their prices.” Campa is priced at Rs 10 for a 200 ml bottle and Rs 20 for a 500 ml bottle.
Positioning will also play an important role in this, he adds. “Reliance will have to figure out how to position the brand correctly and make that positioning distinct from the existing players. Coca-Cola has always been about happiness, whereas Pepsi is all about the younger generation and Thums Up is about daring. Campa Cola will have to find its own distinct positioning. Without that they will just be a generic cola drink. Of course being the largest retailer in the country helps and their vast retail network will definitely be an advantage. But that can’t be the end of it.” According to sources, the company is expected to advertise Campa Cola heavily during the Indian Premier League (IPL).
According to brand strategy expert Harish Bijoor, Campa has the potential of emerging a viable competitor to the two big MNC colas Coke and Pepsi. “The brand has the power of being a local one, in an environment where the local is celebrated over the global. I do believe Campa can enjoy the power of desi-revival to give it wings,” he says but cautions that nostalgia won’t suffice. “The brand and its taste is long forgotten. It is important to stoke these dead embers. It is important to position the brand distinctly with USPs that scream the ‘desi taste’! Desi tone, desi tenor and desi decibel will help.”
The branded non alcoholic beverage market in India is pegged at Rs 450 billion with Coca Cola, PepsiCo, Parle, Dabur and ITC being the key players along with several regional brands. The strong wave towards healthier options will pose some problems for the iconic brand feels Angshuman Bhattacharya, national leader — consumer product and retail sector, EY India. “The carbonated soft drink (CSD) market is witnessing headwinds (4 percent growth) as consumers are moving towards healthier beverages (12-15 percent growth). In this context, CSD is a tough and highly competitive category, hinging on bottling and distribution strengths. Campa Cola is a brand which is familiar to Indians, but will need large investments to scale. However with the largest retail house backing the brand, it could well be a success story given the larger modern trade and general trade platform available to scale it up.”
The return of the cola
Though Campa was synonymous with cola in the 1990s, today’s urban 20-somethings have only heard of the drink through nostalgic ramblings of their parents and older cousins. Incidentally Campa Cola gave actor Salman Khan his first TV commercial, much before he became a mega star. The 1982 advertisement showed Khan guzzling on the cola while on a yacht along with Tiger Shroff’s mom Ayesha Shroff and other models, while a catchy jingle played in the background. This was a time when Bollywood actors used TV commercials to break into the industry. “The creative was pretty much left to me. I had suggested, for some strange reason, that we do it underwater. A lot of people had done beach scenes, a lot of people had done parties scenes, music, beach parties, stuff like that. It was something different and I also liked to travel while shooting ads,” says advertisement film-maker Kailash Surendranath who shot the ad in the Andamans.
“Campa Cola used to be a birthday party treat or a drink we had at get togethers. We would also pack crates of it for long drives and picnics. There was not much choice those days as Coke had just exited the country and Pepsi hadn’t entered. But above all it was a great tasting drink — not too fizzy like Thums Up or overtly sweet like Gold Spot. It was just right,” remembers Swati Roy, an advertising professional.
Aarti Khandelwal a housewife in Delhi remembers visiting the Campa factory in Connaught Place as a student. “We were packed in a school bus and led to this factory where we were dazzled with how colas were made. I remember we were even treated to a bottle each after the visit,” she says. “Ek cola dena actually meant ek Campa Cola dena,” recalls Shirish Date, who loved the soft drink and is eagerly looking forward to picking it up. “I will buy it just for the old times’ sake. It’s a part of my childhood. I just hope they don’t mess with the taste too much. The tag line then was ‘the great Indian taste’ and I hope they stick to that,” he says.
(Published in Moneycontrol)
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March 13, 2023
Tushar Goenka, Financial Express
March 13, 2023
Flipkart Supermart, the online grocery delivery platform of the Walmart-owned ecommerce company, is betting on regional brands to unlock the next phase of growth. Over the past few months, the e-tailer has been listing brands and making them more readily available in cities where their recall value is high.
The regional push targets staples and is pronounced across categories such as atta, tea, pulses, among others. So, instead of offering, say, just the Tata brand of tea, Flipkart also showcases local favourites like Nameri Tea for the residents of Assam. Similarly, instead of selling Nestle’s Maggi and ITC’s Yippie noodles across the country, Flipkart will also let customers pick brands selling Korean noodles, popular among north east teenagers.
The shift in focus is vital in a country whose grocery bill totals $600 billion, of which offline sales account for a staggering $592 billion, while online is a much smaller $8 billion. Further, of the total grocery bill, the share of regional brands at around 60% is much higher than organised national brands that stood at 40%, according to rough estimates from EY.
So far, the plan seems to have worked for the company. Smrithi Ravichandran, head of grocery, says her unit has grown 2.5X between June 2022 and February 2023.
The reason for this shift in focus is easy to understand. In Ravichandran’s own words, “The Indian palette changes every 150 kilometres.” Consider this. The kind of toor daal consumed in Chennai is different from that consumed in Madurai. That is, even within a single state (Tamil Nadu in this case) there is a huge difference in preferences. And that is true for most categories.
Next, look at the potential. Ravichandran’s department sees about 65-70% of its orders coming from Tier 2 and beyond, with metros and Tier 1 cities accounting for the rest.
Analysts believe Flipkart’s initiative is a step in the right direction. Says Devangshu Dutta, CEO, Third Eyesight, a retail consulting firm, “Focusing on regional brands makes eminent sense not just to cater to tastes in a particular geography but to also serve consumers who have moved away from their hometowns and might find it difficult to buy their chosen brands.”
That said, catering to regional preferences is easier said than done. “If one has the same selection even for the same state, it doesn’t help. But there is a cost in catering to that varied choice and we’ll need to operate more fulfilment centres,” Ravichandran adds.
From what to how
Flipkart’s plans to double down on the regional selection in grocery will mean partnering with some of them. Here consumer data available with Flipkart will come in handy, says Ravichandran.
Angshuman Bhattacharya, national leader, consumer product and retail, EY India, believes that by offering more regional brands in categories like atta, Flipkart will deepen penetration, giving smaller players a chance to tap a wider customer base. “Smaller, regional brands will be hungrier for growth and may end up offering healthier margins than what a nationalised player would do,” he adds.
In this, Flipkart’s approach is similar to that of Future Retail under Kishore Biyani, who underscored the importance of a regional brand-led strategy. “The Future Group had launched around 10 private labels of atta and that is no easy feat. A regional brand-led focus might prompt Flipkart to toy with the idea of launching its private labels at a later stage. Or it may even end up asking the regional brands to package staples under its brand, thereby yielding much higher margins,” Bhattacharya of EY points out.
Flipkart isn’t drawing the line just yet. The company will invest in technology to tell customers about the origin of the products they order. “Conscious consumerism is another aspect we will focus on. So, on the packet of a toor daal, consumers will have traceability regarding where and when exactly the daal was harvested,” Ravichandran adds.
This journey will not be a cakewalk for Flipkart. Analysts point out that to be able to partner with Flipkart and address its customer base of over 450 million, smaller brands must up their supply chain spends. That apart, there is always the fear that if the e-commerce giant does not get the desired results, it might discontinue such tie-ups, leaving the regional players in the lurch. Flipkart must allay these fears right at the outset.
(Published in Financial Express)
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December 23, 2022
ET Bureau, Dec 23, 2022
Reliance Retail Ventures, a subsidiary of Reliance Industries and the holding company of the group’s retail businesses, signed definitive agreements to acquire German wholesaler Metro AG’s India business – Metro Cash & Carry India-for a total cash consideration of ₹2,850 crore.
As part of the deal, Reliance will get 31 large format stores in 21 cities as well as the realty portfolio that includes six store-occupied properties, 3,500 staff and Metro’s 3 million B2B customers, of which 1 million are frequent buyers. The deal is subject to regulatory and other conditions and is expected to be completed by March 2023, the companies said on Thursday. ET had first reported in its edition dated Oct 15 that Reliance is the frontrunner to acquire Metro’s India business.
Metro AG said in a release that the India business valuation implies a sales multiple of 0.6x based on sales in the year ended September and takes into account lease rental and other related liabilities of e150 million (₹1,320 crore). Metro India generated sales of ₹7,700 crore (926 million euros), its best ever, in the year ended September.
Metro expects a transaction gain of about 150 million euros and an earnings per share (EPS) gain, once the deal closes.
The move will help Reliance consolidate its presence in the B2B trade segment, which it calls new commerce and is among its next big growth drivers, intensifying competition with Udaan, Amazon and Walmart-owned Flipkart. Reliance owns and runs the country’s largest retail business. All Metro India stores will continue to operate under the Metro brand during an agreed transition period.
Reliance Retail Ventures director Isha Ambani said the acquisition of Metro India aligns with its new commerce strategy of building a unique model of shared prosperity through active collaboration with small merchants and enterprises.
“We believe that Metro India’s healthy assets combined with our deep understanding of the Indian merchant and kirana ecosystem will help offer a differentiated value proposition to small businesses in India,” she said.
Metro AG chief executive officer Steffen Greubel said it is selling a growing and profitable wholesale business at the right time. “Indian trade industry is currently experiencing strong consolidation and disproportionate growth in ecommerce, including the B2B segment,” he said. “Due to the market dynamics, a sizable investment would be required to further grow the business. Therefore, now is the right time to use the momentum and open a new chapter for Metro India.”
Metro said it aims for a leading market position in wholesale. Due to increasing market consolidation, accelerated digitalisation and intense competition, Metro India’s operations don’t fit Metro’s core growth strategy, it said. Abneesh Roy, executive director, institutional equities at Nuvama, said the price to sales ratio is 0.37, which seems fair, given the B2B segment is a low-margin business.
Reliance will gain a significant jump in revenue and established locations that it can expand or optimise under its own branding and formats, said Devangshu Dutta, founder of retail consulting firm Third Eyesight. “The additional shelf space will also be very welcome for its own FMCG brands,” he said.
(Published in The Economic Times)
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December 12, 2022
Christina Moniz, Financial Express
December 12, 2022
This year has seen the entry of several brands into the plant-based meat category, from large players like ITC and Tata Consumer Products to newer brands like Licious. Mock meat, a growing trend especially in Western markets, is a plant-based protein processed to resemble and taste like meat. From vegetarian ‘chicken nuggets’ and sausages to meat-free ‘mutton’ seekh kebabs, most Indian players use ingredients like soya and jackfruit to mimic the texture and taste of meat.
The Indian vegan meat market is rather small currently — estimated to be around Rs 250-300 crore. But consider the potential: About 41 percent of respondents in India identified as either vegan, vegetarian, or pescatarian in a 2021 survey. A report by Wazir Advisors estimates that this category will grow 8-10 times to reach Rs 3,500 crore in 2026.
Looking from a global perspective too, this new category cannot be written off as just a blip. Worldwide, the consumption of such meat substitutes grew from 133 million kg in 2013 to 470 million kg in 2020.
While the projections are fantastic for this market, it is still very small within the entire food category, points out Sandeep Singh, co-founder of Blue Tribe Foods, a two-year-old start-up in this segment. What is needed to grow the category, he believes, is innovation. “The food items need to move beyond burgers and nuggets to appeal to the Indian non-vegetarian consumer. For example, someone needs to create a good chicken tikka masala or a good kheema to attract the Indian palate,” he explains. Earlier this year, star couple Virat Kohli and Anushka Sharma announced their investment in Blue Tribe Foods, a move that has boosted awareness for the brand and category, says Singh.
Variety & cost
Tata Consumer Products, which launched its vegan meat brand, Simply Better, in July this year is tapping into the trend of consumers moving towards healthier and sustainable lifestyle choices. Deepika Bhan, president, packaged foods (India), Tata Consumer Products, maintains that the market holds great growth potential. “Over 70% of the Indian population is flexitarian (consumes both vegetarian and non-vegetarian food). Surveys also show that over 73% of Indians today are protein deficient. These data points signify untapped potential in the plant protein segment. The consumer cohort, which is aware of the health and environmental benefits of plant protein, is likely to expand to a more diverse audience seeking to supplement their diet with alternate, plant-based meat,” remarks Bhan.
Cost is a factor hindering growth. Currently, the pricing for plant-based meat is 1.5 times the price of real meat products. “For premium consumers, price is not a challenge but to gain scale and reach the masses, pricing needs to be more attractive,” observes Devangshu Dutta, CEO, Third Eyesight. Indians have for decades consumed soya nuggets and products as a source of protein and as a meat alternative, but brands today are targeting urban consumers who are not price sensitive. “The consumers that brands are targeting are influenced by trends in Western markets and adopting veganism for ethical or health reasons,” adds Dutta.
Another consumption trend that is unique to Indian consumers is that there are around 100-odd non-meat eating days annually, on account of religious or cultural occasions. Meat and seafood company Licious is targeting these consumers on non-meat eating days with its newly launched vegan meat brand, UnCrave. Simeran Bhasin, business head, alternative protein, Licious, states that all brands in the category are still on a journey to improve their offerings . “Our plan is to create relevance before aiming to take a share in it. Eating is believing, and we want more of our consumers to sample our alternative protein offerings. So, we send samples of UnCrave along with Licious food deliveries to encourage consumption and drive brand awareness,” explains Bhasin.
While UnCrave is currently present in only four cities (Mumbai, Delhi, Pune and Bangalore), she asserts that there is a market for the brand in non-metros too and expects the brand to reach the top 20 markets by the end of the next fiscal.
(Published in Financial Express)
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August 29, 2022
By Sharleen D’Souza & Sourabh Lele
‘First-ever end-to-end shopping experience’ on messaging platform, says Mark Zuckerberg
Meta Platforms Inc, the parent company of WhatsApp, will partner with Reliance JioMart for a service where WhatsApp users can buy groceries on the messaging platform from the Indian retail firm.
Mark Zuckerberg, chief executive officer (CEO) of Meta Platforms, said in a Facebook post, “[I am] Excited to launch our partnership with JioMart in India. This is our first-ever end-to-end shopping experience on WhatsApp–people can now buy groceries from JioMart right in a chat.”
“Business messaging is an area with real momentum and chat-based experiences like this will be the go-to way people and businesses communicate in the years to come,” he said in an announcement coinciding with the annual general Meeting (AGM) of Reliance Industries the parent company of JioMart.
A Reliance press statement said the service “will enable users in India, including those who have never shopped online before, to seamlessly browse through JioMart’s entire grocery catalog, add items to cart, and make the payment to complete the purchase–all without leaving the WhatsApp chat.”
WhatsApp users can shop on JioMart via by messaging “Hi” to +917977079770.
Mukesh Ambani, chairman and managing director of Reliance Industries, said, “The JioMart on WhatsApp experience furthers our commitment to enabling a simple and convenient way of online shopping.”
“Reliance Retail is looking at touching as many consumers across the country and WhatsApp is a logical platform as India is the largest market for the messaging app in the world,” said Devangshu Dutta, CEO of Third Eyesight, a retail consultancy firm. While WhatsApp is important for growth, Reliance Retail will also need to work on product availability and the cost of delivering to the customer, he said.
Ambani said Reliance’s retail business model has “five imperatives”, or ‘Panch Pran’. These include: enriching customer experience using technology; operationalising and growing multiple channels; integrating with small merchants and providing them a platform to prosper. The fourth imperative is to expand the product portfolio and the fifth one is to strengthen logistics and supply chain.
Isha Ambani, director at Reliance Retail Ventures, said at the AGM that the digital commerce platforms–reliancedigital.in and JioMart–enabled the retail major to deliver 93 per cent of online orders from stores within six hours. “We rolled out our JioMart Digital (JMD) initiative during the year. The platform enables small electronics merchants to sell the entire product portfolio of Reliance Retail on an assisted selling model, helping them deliver superior customer experience and growing their income,” she said.
The company’s new commerce initiative is on course to partner with one crore merchants as it expands to cover the entire country in the next five years, Isha Ambani said.
Last year, Reliance Retail entered pharmacy retail with the acquisition of Netmeds. That year, it launched new operations through Netmeds Wholesale and onboarded merchants in 1,900 towns and cities.
Source: business-standard
