The decision by traders in Tamil Nadu not to sell soft drinks and mineral water made by multi national companies will predictably push the sales of homegrown brands by 25-30%. Around 8 national brands and 27 regional brands have already knocked on the doors of the traders association in the State to enquire about promoting their products in Tamil Nadu.
“The State had several homegrown soft drinks brands even before the multinational giants came in. We will now increase market share of products made in the State and in India,” said Tamil Nadu Vanigar Sangangalin Peramaipu President A.M. Vikramaraja. Citing examples, he said Torino is a brand which sells like hot cakes in the Madurai region, Bovonto a grape-flavoured drink from the family of Kali Aerated Water Works is another big brand from here. “There are soft drinks made in Vellore, Salem and other pockets. They have brand loyalty among consumers but visibility. We will give priority to them,” added Mr. Vikramaraja.
Currently, Coca-Cola and PepsiCo dominate the soft drinks market in Tamil Nadu. Both firms do not give out their market share but analysts who track the ₹28,340 crore-soft drinks market in India say that the two firms together hold around 80% market share in Tamil Nadu.
According to a Euromonitor International Report 2016, in the south Sprite and Thums Up, both offered by Coca-Cola, and Pepsi by PepsiCo are the most visible carbonates brands in modern retail outlets. The growing pub culture in major cities such as Chennai and Bangalore has led to an increase in sales of lemonade/lime and energy drinks, which are often used as mixers with alcoholic drinks.
Harish Bijoor, brand expert and CEO, Harish Bijoor Consults, said, “The Tamil Nadu Traders Association move is in tune with trends that will capture the imagination of local trade in the future, if not now. Big brands will face their ire for various reasons. MNC brands in particular will get re-positioned, if they do not address the key issues in question immediately.” He added, “Local brands such as Bovonto will gain for sure. New brands with a local flavour may emerge from this.”
Analysts who track the soft drinks market in Tamil Nadu have indicated that when the jallikattu issue gathered momentum Bovonto and Torino sales in certain pockets spiked by 10%. So if multinationals are not sold in the State there would be more demand for these brands they pointed out.
Both Coca-Cola and Pepsi refused to give details on their market or respond to queries separately. They instead sent a joint statement from the Indian Beverage Association.
Arvind Verma, Secretary General, Indian Beverage Association, in an email said, “At the outset, we would like to clarify that there is absolutely no connection between our member companies and the ongoing events in Tamil Nadu. As responsible companies, both Coca-Cola India and PepsiCo India have made a significant contribution to Indian economy and society over the past couple of decades.”
He added that the proposed call was not just against the interest of the farmers, traders and retailers of the State, it also undermines the role that the industry can play in economic growth and development.
