Reliance-fuelled Campa’s rise has cola makers splurging on marketing

Reliance Industries last year made a strategic move into the soft drink sector by acquiring the iconic carbonated beverage brand ‘Campa Cola,’ which gained prominence in the 80s and 90s.

The conglomerate intends to strengthen its brand by employing its classic pricing disruption strategy. Reliance is expanding its presence nationwide by focussing on affluent regions and utilising e-commerce and quick commerce platforms.

Recent reports suggest that Campa Cola is providing retailers with more favourable trade margins than its rivals Coca Cola and Pepsi, aiming to challenge the existing duopoly in India’s soft drink market.

In the Q2FY25 earnings call, Reliance Industries reported that its consumer brands, particularly Campa Cola and Independence, are experiencing robust growth, with general trade increasing by 250% year-on-year.

“We are taking several marketing initiatives to grow consumer brands and will leverage the festive period to drive demand,” the company’s representative said during the call, adding that the company was “very optimistic about the next few quarters”.

Experts now believe that the soft-drink beverage market will witness an increase in advertising initiatives by the competitors to mitigate the disruption.

Saurabh Munjal, co-founder and CEO of Archian Foods, the makers of Lahori Zeera, asserts that Reliance’s entry into this sector will only expand the market for soft-drink beverages.

“The consumption will increase, accompanied by a corresponding rise in marketing efforts,” he adds.

Also Read: Ashwini Deshpande of Elephant Design on what it took to rebrand Campa 

Devangshu Dutta, the founder of ThirdEye, a management consulting firm engaged with the retail and consumer products ecosystem, asserts that both Coca-Cola and Pepsi will undoubtedly endeavour to safeguard their market share. 

He says the emphasis will particularly be on domestic consumption, and we can anticipate an increased investment in share-of-mind campaigns to proactively counter Campa’s expansion.

Business strategist and independent director Lloyd Mathias believes that the current circumstances are conducive to market expansion and disruption. “Other players will likewise increase their visibility through marketing strategies and retail initiatives to counter this. So what we will see in the next year is that the categories of soft drinks will grow quite dramatically,” he adds.

The classic Reliance move

Experts suggest that Reliance’s approach to Campa Cola involves competitive pricing, reflecting a strategy akin to its disruptive tactics in the telecom sector with Jio and JioCinema. For instance, a two-litre bottle of Campa Cola’s lemon flavour is priced at Rs 53 on a quick commerce platform, whereas a leading competitor offers it for Rs 74.

Besides competitive pricing, Reliance also has the significant advantage of owning a large retail and media network to scale Campa Cola.

“Reliance has earlier disrupted markets with the aggressive pricing strategy and it has the resources to follow-through on its pricing strategy for Campa as well. It can build significant volumes across its own stores prior to having to compete for shelf space in the broader distribution channels,” says Dutta.

As per Mathias, in addition to possessing deep pockets, Reliance benefits from its extensive media and entertainment wing that will be leveraged for the promotion of Campa Cola.

“I think the combined strength of Reliance in terms of distribution, media, and retail, alongside its capacity to maintain pricing integrity, are quite formidable. I think they are going to make a significant impact in the market,” says Mathias.

Also Read: Campa Cola aims to quench the thirst of new India in latest campaign

Also Read: Reliance Consumer brings back ‘Campa’

Impact on smaller players

Experts also suggest that the introduction of Campa Cola at its current price point will primarily affect smaller local competitors who function within the same pricing bracket, particularly in tier-2 and tier-3 markets. 

Mathias asserts that Campa Cola will initially expand the soft-drink beverage market, while also emphasising that given the price point of the soft drink, the immediate impact will be felt by smaller local players who operate at similar price points. Introduction of numerous Indian innovations within the soft-drink category could significantly impact relatively smaller competitors.

Similarly, Dutta observes that the market for carbonated beverages largely hinges on the intangible qualities associated with the brands. In India, however, brand preferences are not as hard coded as they are in the United States.

“Consumers do switch between brands, and price-sensitive customers can be swayed by visible pricing differences. This gives deep-pocketed Reliance an opportunity to carve out a significant market share.”

However, according to Munjial of Lahori Zeera, there appears to be no direct impact on his brand, given that Campa Cola has thus far only introduced the well-known flavours of carbonated beverages. “As far as Lahori Zeera is concerned, there is no impact because the target consumer, the flavours are all very different.”

“This development will merely add to the market and increase the number of people consuming carbonated beverages,” he says.

Also Read: Reliance acquires Campa, Sosyo from Pure Drink

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