To compete with US beverage giants PepsiCo and Coca-Cola, Indian industrial giant Reliance has revitalized a historic local cola brand (Campa Cola). The company hopes to utilize its extensive retail network, lower pricing, and capitalize on nationalist fervor to win over consumers.
“Cola wars” is commonly used to characterize the competition between Pepsi and Coca-Cola for dominance in the carbonated beverage market. While the rivalry has been ongoing for decades, sometimes including open attacks on the other brand, the two behemoths now face the Campa Cola, brand of Reliance Industries in India.
With the entrance of India’s largest business magnate, Mukesh Ambani, the cola wars will become more vicious. Early in March 2023, Reliance reintroduced Campa Cola, which it had acquired late last year. In the 1970s and 1980s, in the absence of Coca-Cola and Pepsi, Indians consumed ample amounts of a particular brand of cola that is making a comeback.
The rise and fall of Campa Cola
Campa Cola became a ubiquitous name in the second half of the 20th century, appealing to Indian patriotism as a homegrown soft drink produced by an Indian company as opposed to an import from multinational corporations based in the West. Its advertising slogan was “the great Indian taste.”
Lack of competition contributed to the company’s thriving sales. The Indian economy was planned in the manner of the Soviet Union, and the government opposed all things western. Coca-Cola was forced to leave India in 1977 after refusing to reveal its famous secret formula with its Indian entities in response to a government order. Pepsi was not yet available.
In a country with a lengthy and hot summer, Campa Cola filled the gap left by Coca-Cola’s departure. Even though Indians knew it was not the “real thing,” it remained a popular treat at birthday parties and gatherings.
When India liberalized its economy in 1991, Pepsi and Coca-Cola both entered the market. Suddenly, Campa Cola became extremely unpopular. In the early 1990s, Campa Cola virtually disappeared from grocery store shelves as a result of competition from the two soft drink industry titans.
Campa Cola 2.0
Last year, Reliance Industries acquired Campa Cola for Rs 22 crore. The company initially introduced three flavours: Campa Cola, Campa Lemon, and Campa Orange. The launch was restricted to Andhra Pradesh and Telangana only. Considering its past success and the Reliance Group’s reputation for dominating the industries they enter, the return of this iconic brand after 50 years is sure to cause a commotion among other cola companies on the market.
How challenging it is to re-establish Campa Cola in the Coke- Pepsi era?
Last year, Reliance Industries acquired Campa Cola for Rs 22 crore. According to brand experts, defunct brands that elicit a sense of nostalgia are capable of making a comeback. Arushi Patel, a 60-year-old investment consultant from Delhi, stated, “I plan to buy it and give it to my grandchildren to show to them the taste of my childhood – the taste of sweet innocence.”
However, it may be difficult for Reliance to attract younger Indians to its brand. In addition, Coca-Cola and Pepsi are widely available throughout India, even in the smallest villages. Their logos are painted on storefronts and walls even in the most remote deserts and forests. They distribute their beverages through four to five million retail locations with whom they have a long-standing relationship and the most shelf space.
“The launch of this brand is in line with the company’s strategy to promote homegrown Indian brands that not only have a rich heritage but also boast a deep-rooted connect with Indian consumers due to their unique tastes and flavors,” said Reliance in a statement.
According to brand specialists, Campa Cola is not part of Indian culture in the sense that it is anchored in ancient traditions or social customs.
At first look, it may appear that Ambani might have a hard time breaking the dominance of Pepsi and Coca-Cola in a market that is expected to rise at a rate of 5% annually to $4.6 billion by 2027, according to research from Euromonitor. Other notable tycoons, including Richard Branson with his Virgin Cola, have unsuccessfully attempted to compete with the drinks titans.
Seven years ago, however, the wealthiest person in Asia, Ambani, famously disrupted India’s telecommunications market with aggressive pricing, establishing Reliance as the industry’s dominant player. In addition, he employs a portion of this strategy in his soft drink business.
The pricing and distribution competence may affect the existing brands
According to a source with direct knowledge of Reliance’s plans, the company intends to establish factories on its own or in joint ventures to produce Campa and distribute the soda to hotels, restaurants, and airlines. After its $2.7 million acquisition of the brand last year, Campa’s production is currently outsourced.
The company is drastically reducing in-store prices. A check by Reuters revealed that a two-liter bottle of Campa Cola costs 49 rupees (63 Taka) in stores, which is nearly a fifty percent discount from its label price and roughly a third less than 2.25-litre bottles of Coke and Pepsi. Pepsi begins at 12 rupees, while the smallest Campa Cola and Coke bottles cost 10 rupees each.
Reliance, the largest retailer in India, will distribute Campa to its 2,500 grocery stores and thousands of smaller non-network stores as part of its new consumer goods drive, for which it has set an internal five-year revenue goal of $6.5 billion.
Additionally, the company has a grocery shopping app and a wholesale vertical through which it supplies consumer products to 500,000 mom-and-pop shops, both of which will be utilized to sell Campa.
Coca Cola and Pepsi at threat
“Coca-Cola and Pepsi are unused to a nationwide challenge, and Reliance has the financial muscle and reach to challenge them with a local brand with a high nostalgic value,” according to Amulya Pandit, a consultant at Euromonitor International.
Already, Coca cola seems to be shaken with the entrance of Campa Cola as it has reduced the prices of it’s 200 ml bottles in key states where Campa Cola has launched initially. Coca Cola has decreased the price of its least expensive 200 ml PET bottles from Rs. 15 to Rs. 10 in Telangana, Madhya Pradesh, and Maharashtra. The price of Campa Cola’s 200 ml polyethylene terephthalate (PET) bottles is also 10 rupees.
Although Coca Cola has denied the reduction of prices based on Campa Cola’s arrival. Pepsi also confirms no price change amid all these.On top, Reliance has partnered with three renowned franchise cricket teams in an effort to compete with Coca-Cola Co. and PepsiCo Inc. with its iconic cola brand, Campa.
Campa Cola has returned after an absence of 30 years, and in a happy turn of events, it is now competing with the brands that inspired it. It is just matter of time to see how effectively the Campa Cola 2.0 can take the market leaving Coca Cola and Pepsi behind!