Actor Ranveer Singh is all over social media these days exhorting consumers to be the king of the night. As the endorser of a new variant of energy drink Sting, Gold Night Fuel, Singh’s histrionics will come handy for PepsiCo India, the brand’s promoter, as it positions the latter as a go-to product for night owls. The price is the same as a regular Sting, at `20 for a 250-ml PET bottle, to ensure it has wide reach.
In the eight years since launching Sting in India, PepsiCo has upended the energy drinks market, once a niche category characterised by high prices, premium packaging, metro positioning and limited availability. Red Bull, the leading energy drink worldwide, commanded a lion’s share (75-80%) in a small market in India, valued at 500 crore, in 2017. Today, the tables have turned, with PepsiCo’s Sting being the leading brand, with a 75-80% share of the domestic energy drinks market, which has expanded to5,000 crore, according to industry executives quoting Euromonitor data. Red Bull is estimated to have a share of 7-8% now. A 250-ml Red Bull can, for instance, is available for `125 at supermarkets, out of reach for many consumers of energy drinks.
While rival Coca-Cola India has been quick to follow up with Charged by Thums Up, an energy drink priced at 20 for a 250-ml PET bottle, it is price warrior Reliance Consumer which is likely to take the battle to the next level, say experts. Over the last few months, Reliance Consumer has made big moves in energy drinks and adjacent categories such as hydration (Rasik Gluco Energy) and sports drinks (Spinner). The firm has launched a range of flavours including classic energy variants like gold boost and berry kick as well as new flavours such as lemon kick, cola kick and orange kick apart from a zero-sugar variant. The products are priced affordably at 10, 20,30 and `50 for 150ml PET, 250 ml PET, 185ml and 330 ml cans each, sources in the know said, which are being pushed both online and offline.
“It is a classic case of de-premiumisation versus premiumisation. In the former, a player is trading up to reach a small, but high-paying set of consumers. In the latter, a player is targeting the masses, with relevant price, product, packaging and promotions,” says Ankur Bisen, senior partner and head, consumer and retail practice, Technopak Advisors.
Some experts see this as a natural progression of a market, where economic prosperity is bringing more people into the consumption net. At the same time, companies are conscious that these neo or new consumers require the right set of products at the right price, especially in fast-moving consumer goods (FMCG), where India’s per-capita consumption is amongst the lowest in the world at under $50, according to Euromonitor.
For beverage companies, the need to de-premiumise is even more relevant, as they continue to seek the next big consumer opportunity, says KV Sridhar, veteran adman & global chief creative officer at consulting firm Nihilent. Sridhar has worked on brands such as Thums Up, Coca-Cola and Maaza during his advertising days and knows a thing or two about the aggression displayed by beverage firms when it comes to sniffing out a consumer opportunity. Massifying energy drinks is a classic example, he says.
“For beverage firms, the need to push volumes is very high. Large firms are constantly seeking the next 100-million consumers in the market. The need to play the scale game increases as a result, pushing them to drive reach, improve distribution, reduce price points and introduce more variants across carbonated and non-carbonated beverages including energy drinks,” he says.
Both Coca-Cola and PepsiCo have indicated through the years that India remains the frontier of growth for them, where the two firms are making big investments in manufacturing, marketing and distribution. “In India, we had strong volume growth across our portfolio of global and local brands. Our system added nearly 350,000 outlets and increased household penetration. Also, our system increased cooler placements and added approximately 100,000 customers to its digital customer platforms,” James Quincey, chairman & CEO of The Coca-Cola Company, said after the firm reported double-digit volume growth in its India business in the March quarter last week.
Ramon Laguarta, chairman and CEO of PepsiCo said last week that he saw India being in a good place as growth trends continued to be strong in the domestic market.Reliance Consumer’s COO Ketan Mody says the company will continue to democratise FMCG, reducing entry barriers and giving more people a chance to sample its products including its growing line-up of beverages. Clearly, the counter trend of de-premiumisation is only set to grow within FMCG.