In an aggressive bid to crack the country’s rural market, Coca-Cola has introduced ready-to-drink 100 ml packs of its mainstream fruit-based beverage, Maaza, for Rs 6. The product, in low-cost tetra-fino packaging, has been launched as a pilot in three districts of Uttar Pradesh; the firm will take it to other parts of India if the idea clicks.
This is going to be the lowest price for a Coke product in the non-returnable ready-to-drink category, where the pricing ranges from Rs 8 to Rs 12 and goes on to as high as Rs 60 for a two-litre plastic non-returnable pack. In package size, too, this is the smallest in the beverage product category - the smallest so far were the 200 ml returnable bottles.
Explaining the strategy, Coca-Cola India President & CEO Atul Singh told Business Standard in an exclusive interview: “There are two million retail outlets in rural India where we sell our products. There are consumers who want packaged beverage at an affordable price. We have been working with our suppliers to get affordable packaging and have got Maaza at the right price point.”
He said the challenge would be making carbonated drinks affordable for the rural market. At present, these are sold at Rs 8-12 - not affordable for a large swathe of the market. “We need a sustainable model and there are cost constraints. But, we do recognise there are consumers who are not ready to buy at high prices. That’s a challenge; we have to innovate in packaging, distribution, transportation and cooling equipment.”
At present, neither of the two beverage majors - Coke and PepsiCo - has ready-to-drink mainline branded products at Rs 6. Coke had introduced Fanta Fun Taste powder for Rs 5 but that had to be mixed with water. It had also introduced micronutrient powder sachets at Rs 2.50-3. PepsiCo, on the other hand, sells fruit juice powders for Rs 10, besides Tata Glucose (under a JV with Tatas) for Rs 6.
Singh also said there was a possibility of companies coming together to sell non-competing products, to address the distribution challenges in serving chilled products in rural markets. “In the future, we may collaborate with firms manufacturing, say, ice creams or chocolates, to create a sustainable common infrastructure, such as cold-chain trucks and refrigerators, which could be shared.”