Cola wars to intensify in India

The cola wars will no longer be restricted to Coke and Pepsi, with their Latin American competitor Ajegroup setting up shop in India.

The Peruvian company has introduced Big Cola at an invitation price of Rs 18 for a 535-ml PET bottle in Mumbai, Pune and Surat. Pepsi and Coke sell the similar pack size cola for Rs 23.

The plan, according to persons in the know, is to extend the reach of Big Cola in Maharashtra and Gujarat before moving to other states.

Ajegroup, which only last year stepped outside its home turf, launching operations in Thailand, has a bottling unit in Patalganga, Maharashtra.

The unit, set up at an investment of Rs 50 crore (Rs 500 million), can produce 600 bottles per minute, said the sources. Though Big Cola executives remained unavailable for comment, the sources said the Patalganga unit can accommodate one more line as Aje looked to expand its business in western states.

Ajegroup is also

looking to sell Big Cola in larger PET bottles. Packs of 1.5 and three litres will be launched in the coming months once the brand finds its footing, according to the sources.

A formal launch of Big Cola is expected in few weeks in the markets where it is present. Aje has appointed Mumbai-based creative agency Cartwheel and media agency Karishma Initiative for this.

The initial ad spends are in the region of Rs 30-40 crore (Rs 300-400 million), as Aje looks at radio and outdoor to promote the brand.

The use of print and television is likely to happen later, as Big Cola is rolled out in other markets.

Coke and Pepsi executives are cautious in their response to Big Cola. Trade sources said the two cola companies were examining how Big Cola maneuvered itself in a market dominated by them.

With a 15 per cent share, Thums Up is the leading carbonated beverage, followed by Sprite (14.7 per cent), Pepsi (13-14 per cent), Limca (12 per cent) and Fanta (10 per cent). Coca-Cola is at sixth place with a share below 10 per cent.