Cola giants gear up for rural slugfest
It has the potential to become amongst the most fiercely fought battle in the history of Coca-Cola and PepsiCo India. After wrestling it out on urban streets, the world's biggest cola majors are racing down the rural path for growth.
While Coca-Cola India has launched a programme to train dhabawallas in the basic skills of handling customers and managing eating joints close on the heels of its Parivartan training programme that helped build the retailing capability of nearly 1.8 lakh kirana storeowners, PepsiCo India is focusing on quirky marketing campaigns and a more robust distribution model to woo rural customers.
Says Venkatesh Kini, deputy president, Coca-Cola India and South West Asia business unit: "We are alive to the rural opportunity and are leveraging our distribution and supply chain to meet consumer demand. The rural opportunity also dovetails into our long-term strategy to de-seasonalize the business."
Beverages play a significant role in driving revenue for food services by contributing 27% to food business revenues, reveals marketing intelligence firm Euromonitor.
This is the latent opportunity that Coca-Cola India wants to tap with its newest training programme that has been piloted in Amritsar and Ludhiana. "These are initial days but the response has been good," says Ramesh Chander Dutta, director of Coca-Cola University, who is a former dean of Tata Institute of Social Sciences and the brain behind this initiative. "In its second stage, the programme could be scaled to train 5,000 dhabawallas by 2014."
Rachna Nath, leader retail and consumers, PwC India, calls it forward investment. "It's a smart move by Coca-Cola India," she says. Data from the National Restaurant Association of India (NRAI) reveals that urbanising double-income households, changing lifestyles and food preferences are driving the organized market for the "eating out" business segment, which is estimated to be at around Rs 78,000 crore but expected to reach Rs 1, 68,00 crore in five years. For instance, in Bangalore, as per Directorate of Census Operations, Bangalore, about 3.5 lakh people in the state eat out every day with eating out habits being more widespread in rural areas than urban agglomerations — 0.6% for rural population and 0.5% for their urban counterparts in Karnataka do not cook at home at all.
At the other end of the spectrum, PepsiCo India added 1.5 lakh new rural outlets and augmented its rural workforce by 20% over the last three years. "Rural has been a key growth driver for us for the last three years and is growing much faster than urban. We remain aggressively invested in the segment," says Deepika Warrier, VP, beverage marketing, PepsiCo India.
For the festive season, PepsiCo India is launching a talk-time promo offer that will give pre-paid mobile users in rural markets a unique opportunity to win free mobile talk time.
Says Jagdeep Kapoor, CMD of Samsika Marketing Consultants, a Mumbai-based brand marketing-services firm, which in the past was head of marketing for a number of popular drinks, including Thums Up: "India has 8,100 towns and 6.5 lakh villages with 18 million outlets. However, even established consumer goods companies in India such as, HUL, has not been able to been able to crack even 10% of that market. With markets in Tier II and Tier III remaining where they are, these cola companies have no other option but to take the fight to rural India."
While Coca-Cola India has launched a programme to train dhabawallas in the basic skills of handling customers and managing eating joints close on the heels of its Parivartan training programme that helped build the retailing capability of nearly 1.8 lakh kirana storeowners, PepsiCo India is focusing on quirky marketing campaigns and a more robust distribution model to woo rural customers.
Says Venkatesh Kini, deputy president, Coca-Cola India and South West Asia business unit: "We are alive to the rural opportunity and are leveraging our distribution and supply chain to meet consumer demand. The rural opportunity also dovetails into our long-term strategy to de-seasonalize the business."
This is the latent opportunity that Coca-Cola India wants to tap with its newest training programme that has been piloted in Amritsar and Ludhiana. "These are initial days but the response has been good," says Ramesh Chander Dutta, director of Coca-Cola University, who is a former dean of Tata Institute of Social Sciences and the brain behind this initiative. "In its second stage, the programme could be scaled to train 5,000 dhabawallas by 2014."
Rachna Nath, leader retail and consumers, PwC India, calls it forward investment. "It's a smart move by Coca-Cola India," she says. Data from the National Restaurant Association of India (NRAI) reveals that urbanising double-income households, changing lifestyles and food preferences are driving the organized market for the "eating out" business segment, which is estimated to be at around Rs 78,000 crore but expected to reach Rs 1, 68,00 crore in five years. For instance, in Bangalore, as per Directorate of Census Operations, Bangalore, about 3.5 lakh people in the state eat out every day with eating out habits being more widespread in rural areas than urban agglomerations — 0.6% for rural population and 0.5% for their urban counterparts in Karnataka do not cook at home at all.
At the other end of the spectrum, PepsiCo India added 1.5 lakh new rural outlets and augmented its rural workforce by 20% over the last three years. "Rural has been a key growth driver for us for the last three years and is growing much faster than urban. We remain aggressively invested in the segment," says Deepika Warrier, VP, beverage marketing, PepsiCo India.
For the festive season, PepsiCo India is launching a talk-time promo offer that will give pre-paid mobile users in rural markets a unique opportunity to win free mobile talk time.
Says Jagdeep Kapoor, CMD of Samsika Marketing Consultants, a Mumbai-based brand marketing-services firm, which in the past was head of marketing for a number of popular drinks, including Thums Up: "India has 8,100 towns and 6.5 lakh villages with 18 million outlets. However, even established consumer goods companies in India such as, HUL, has not been able to been able to crack even 10% of that market. With markets in Tier II and Tier III remaining where they are, these cola companies have no other option but to take the fight to rural India."
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