A Jio moment in cola war? Reliance ups the ante with iconic brand Campa

Brand to be launched across the country, beginning with Andhra Pradesh and Telangana

Can Reliance play the price warrior combined with leveraging its own retail distribution to take on the might of global beverage giants Coke and Pepsi?

On Thursday, Reliance Consumer Products Ltd (RCPL) which had bought retro brand Campa Cola from Delhi-based Pure Drinks for Rs 22 crore a few months ago, announced the launch of the brand across the country beginning with Andhra Pradesh and Telangana.

Brands that have passed into history are rarely revived but Reliance is re-launching Campa Cola which used to be popular in the 1970s, especially in north India.

Initially, when Coke exited India, Campa Cola thrived. When both Coke and Pepsi roared back, it was a David to the two Goliaths in putting up a good fight but eventually it went down. Reliance is clearly looking at disrupting the market by playing the pricing game at the entry level — it is offering Campa in three flavours cola, orange and lemon at a mere Rs 10 for 200 ml in a PET bottle.

Said a senior executive of one of the beverage companies: “At this entry level price we believe they can never make money, We also have a 200 ml offering but in a returnable bottle at the same price, so consumers have a choice at a similar price.”

The executive said that the MNCs sell their cans at around Rs 32 for 250 ml and a pet with the same liquid at Rs 20 which is substantially higher than the Reliance offer.

But MNC beverage companies are not worried because they see it merely as a customer acquisition strategy. They point out that Reliance’s focus is not to enter into a headlong battle with Coke and Pepsi and challenge their domination.

Instead, the re-launch is part of Reliance’s larger long-term strategy to build a stable of ‘private labels’ in FMCG brands.

Retail experts say they are doing this through acquisitions and acquiring stakes in brands such as beverage brand Sosyo and chocolate brand Lotus. Talks are on to buy Garden, a snack brand. Reliance is also developing its own inhouse private label brands such as Desi Kitchen and Good Life.

Experts say the Reliance plan is two-fold. First, sell these brands through its own distribution outlets, for example, its 16,5000 retail stores, its online platform JioMart (which is in 250 cities) or through its cash and carry retail partners (Reliance recently bought Metro Cash & Carry). Second, reach out to the millions of kirana outlets and buy shelf space, rather like Coke or Unilever.

In fact, it has already made inroads into over two million merchant outlets through JioMart who help the company in the last mile delivery and the number is expected to go up to 10 million in a few years.