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Sunday, June 7, 1998

Market dynamics force Coke to delay launch of diet cola 

Anuradha Ramachandran  
CHENNAI, June 6: Coca-Cola has no plans to introduce diet colas in the Indian market this year. It will, instead, concentrate on market-building for its existing brands.

An official Coke spokesman told The Financial Express that plans to introduce diet cola in India would be delayed owing to market dynamics. "Bringing in Diet Coke at this point of time does not make sense for us. Volumes in the soft-drink market are just picking up and, given the existing demand, introducing diet cola would not be feasible," he said.

The removal of government restrictions on aspertame, one of the ingredients of diet colas, has paved the way for their entry into the Indian market. But apparently, volumes do not justify a production line, given the current consumption levels. According to the Coke official, total soft-drink consumption in India was around 192 million cases. Coke would need to sell 120 million cases of Diet Coke alone to make minimal margins. Lower consumption levels would not be economically viable,he said.

Instead, Coke has decided to strengthen its existing stable of brands, with Thums Up as the focus.

As a part of this strategy, Coca-Cola India is planning to export Thums Up and Limca cans to the Middle East and South Asian countries. The company is close to tying up its distribution network in these countries.

Coke officials said market studies showed that Thums Up was the fastest growing brand in Asia. The move to export the soft drink was a part of the exercise to push the brand's sales higher, he said.

Thums Up has a clear leadership of the Indian cola market, while Limca is the leading brand in the lime and lemony segment. Coke has identified the NRI segment which would kick-start Thums Up in the Middle East and south-east Asia.

Thums Up and Limca will be sold in cans, the most popular packaging form in these countries.

Meanwhile, the company has also drawn up plans for Citra. Citra is a strong player in the clear-lime segment, especially in the south.

Coke has plans to launchCitra as a national brand in the segment, thus changing its focus from a regional to a national brand.To this end, the company has already drawn up plans for several brand support campaigns through advertising support and retail support.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.



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