 | « Back to article | Print this article |
Royal Crown Cola, the third-largest cola brand in the US after Coke and Pepsi, is entering India this summer.
The Canada-based Cott Corp had acquired the rights for the brand -- called RC Cola -- outside the US, from Cadbury Schweppes a few years ago.
The company is launching the brand in cola, lemon and orange flavours through a licensing, franchise bottling agreement with two companies in India.
One will be based in Chandigarh overseeing the north, the other will be based in Hyderabad overseeing the south and west.
A source from the Chandigarh-based franchise bottler said a bottling plant is being set up near Chandigarh, and the products are scheduled to hit the markets on April 20, if not, latest by the first week of May.
"Initially, we will manufacture 500 ml PET bottles. Later, we will manufacture smaller size PET bottles because that is where the volumes are expected to come from," he said.
The company will not get into the returnable glass bottle segment, but may contemplate venturing into the can segment, he added.
The executive said there were no plans for imports. "There is enough capacity available with us to cater to the demand we are expecting for our products. If need be, we can acquire some more capacities," he added.
The company has approached existing distributors of Coca-Cola and Pepsi to become its distributors. But it is reliably learnt that it has asked them to make a deposit of Rs 50,000-Rs 100,000 in advance.
The RC Cola franchise source, however, declined to comment on this. He said the company has established a very strong distributorship channel, especially in Delhi and western Uttar Pradesh.
RC Cola changed hands from Cadbury Schweppes to Cott Cola a few years ago. Cadbury had bought RC Cola along with Snapple Beverage Co as part of its $1.45 billion acquisition of the beverage operations of Triarc Cos.
When the non-US rights for the brand was sold to Cott Corp, Cadbury kept the RC Cola business in the US, where it also sells Dr Pepper and 7 UP.
The deal satisfies an agreement Cadbury signed when it sold the majority of its international soft-drink businesses to Coca-Cola Co and agreed not to compete with Coke in those markets.
The deal also falls in line with Cadbury's strategy of streamlining its drink operations to concentrate on several markets in Europe, the US and Australia, and divest itself of businesses that don't offer significant strength in a particular market.
In India, the soft drinks market is dominated by Pepsi and Coca-Cola. The domestic brands have a minuscule market share as they are unable to compete with the financial and marketing prowess of these two companies.
The soft drinks market, run mainly through the returnable glass bottles route, grew by over 20 per cent last year, and is expected to post a similar growth this year as well.
The companies have made a headway in enhancing volumes and penetration by launching 200 ml returnable glass bottles. The 500 ml PET bottle experiment has also succeeded in the past few years.
Getting fizzical