With the advent of Jio, Reliance disrupted the telecom sector. Gradually, it became the largest player in telecommunications surpassing other established players like Airtel, Vodafone, and Idea among others. It forced several telecom giants to shut down their businesses. Now, it seems that the Indian Multinational conglomerate is planning to do the same in the FMCG (Fast moving consumer goods) sector, especially in soft drinks. It is planning a mega Diwali relaunch of India’s favourite desi beverage Campa Cola.
Reliance enters the soft drink market
Reliance Retail has made an astounding entry into the beverage market. It has acquired desi soft drink brand Campa cola from the Pure Drinks Group. Reportedly, the deal is estimated at Rs 22 crore. The organisation is planning to nationally relaunch the desi drink – Campa flavours by this Diwali. In the initial phase, it will be launched in three mouth-watering flavours – the iconic original (Cola), and lemon and orange variants.
Soft drink brand Campa, once the market leader with its Cola variant Campa Cola, is going to make a comeback in October, thanks to Reliance Industries which has acquired the brand as part of its strategy to scale up the FMCG business.
— Economic Times (@EconomicTimes) August 31, 2022
This acquisition is a part of Reliance Retail’s strategy to scale up its FMCG business. The deal will bring back India’s once-favourite desi cola in the market. As per a report in the Economic Times, Campa soft drinks will be initially launched in Reliance Retail stores, Jio Marts and over 15 lakh kirana shops linked with Reliance’s Business to Business (B2B) network.
It is important to note, that after Mukesh Ambani’s resignation, his daughter Isha Ambani is leading the Retail arm of the wider Reliance group. She took over the reign of Reliance Retail at the Annual General Meeting (AGM). Recently, she had announced that Reliance Retail will foray into the FMCG segment.
This is a great news for Indian consumers especially those who are already feeling nostalgic for the drink. However, this is a danger sign for foreign brands like Pepsi, Coca-Cola and Sprite. Campa Cola’s entry will force them to change their market strategy. They may be forced to slash down their prices fearing a take over by people’s favourite desi drink.
Soft drink market: Ups and Downs of Campa cola and its other rivals
In 1949, American soft drink company Coca Cola partnered with Indian company Pure Drinks Group for Indian market’s business. They launched and flooded the Indian market with Coca Cola. The Pure Drinks Group was the only licensed manufacturer and distributor in India. Everything was going great for Coca Cola till the Indian government introduced Foreign Exchange Regulations Act (FERA).
In 1976, the Coca Cola company turned down requests to share its secret formula. This prompted the then Janata party government to refuse licence to the company for violation of FERA law and the company withdrew its operations fro India. Back then, these foriegn brands were seen as a symbol of Western cultural imperialism.
Pure Drinks Group, which was producing Coca Cola till then, launched Made in India soft drink Campa Cola for the first time in 1977. Gradually, Campa Cola popularised itself as “Great Indian Taste”. The brand was an instant hit and it became people’s drink in a very short period of time. Its only competition was soft drinks developed by Mumbai-based Parle — Gold Spot, Limca and Thumbs Up.
Apart from these other local brands like Bovonto and Sosyo captured regional markets. Campa Cola conquered the North Indian markets, Bovonto ruled the south and Sosyo established itself in the western parts of the country.
However, the great liberalisation changed everything for these companies. Coca-Cola made a comeback in 1993 and acquired all the three brands of Parle. Other foreign brands too started pushing these desi brands out of the market. By the year 2012, Campa went into the abyss.
However, this new acquisition by Reliance retail will revive ‘The Great Taste of India’. The road ahead for foreign soft drink brands may be bleak but the consumers seem to be elated at this revival of their favourite soft drink brand.
Reliance is famous for routing out its rival. It has virtually dipped its fingers in every sector, ranging from petrochemicals to fashion, textiles to telecommunications. Now, with this acquisition, it has made its presence felt in the FMCG sector. If the past trend continues, Indian consumers will relive the nostalgia of 1980-90s. However, this has a tremendous capability to shatter the market dominance of American brands like Pepsi or Coca-cola.
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