PepsiCo India Adds Ethnic Flavours To Take On Local Players

Under pressure from small regional beverage players that have been snapping at the heels of large MNCs, PepsiCo India has lined up around seven new fizzy drinks under its Slice brand to lure consumers.

The company is introducing new ethnic favourites like guava chili and jeera to push sales apart from mainstream flavours such as lemon and orange.

A spokesperson for PepsiCo India said the variants will have 11% juice and will be sold in smaller serves of 250ml at an affordable price point.

As per the industry experts, while sugary carbonated drinks attract GST of 40%, companies pay around 12% GST on juices. PepsiCo’s new drinks are slated to fall into the latter category.

A spokesperson said, “The new range of locally relevant, fruit juice drink with fizz under brand Slice will be available as a pilot in select markets to start with. Rural and rest of urban (RoU) segments are currently 60% of the juice category and have been growing faster than metros. By riding on both company and franchise go-to-market sales and distribution infrastructure, we want to dial up growth and market access for our juice products in these key rural, RoU markets.”

Over the last few years, the Rs.14,000-crore carbonated soft drink industry in India has faced flak from consumers, who suddenly had a plethora of healthier options, such as dairy products or juices from local players to choose from.

Akhil Gupta, MD of New Delhi-based Fresca Juices said, “We introduced juices in all possible pack sizes, from 160ml and 300ml to one-litre and even two-litre economy packs. Starting with just one litchi flavour, Fresca has currently introduced new flavours, including orange mojito and tomato.”

Prices of carbonated drinks also witnessed an upward trend with the government increasing sin tax. To add to the woes of biggies, small regional players cropped up, launching 250ml PET bottles at Rs 10, which often mimicked variants from the larger players. As a result, sales growth of the industry remained stagnant.

CEO of a Gurgaon-based beverage company said, “PepsiCo’s new offensive will be watched carefully by beverage companies, as many said blending fizz and fruit is a tricky job. Parle Agro’s Fruity Fizz didn’t work in the Indian market.”