Cola War ’09: Pepsi adds fizz to take on Thums Up

To break the market leader status of Coke's Thums Up...Pepsi is adopting a new taste... Looks like they are test marketing it in AP as of now... but if they feel its works well they may extend it to PAN India.. But just imagine.. you will get a new taste of Thums Up in AP and different taste in rest of the country isn't that a little funny. Time will tell now where does this leads Pepsi too in the longs run..For us, we may never find the sweet syrup of Pepsi after some time... Good for me...i dint liked that a sweet taste of it...

Article in ET as on March 2003

IMITATION doesn’t seem to be a form of flattery for the $15.4-billion global cola brand Pepsi, as it looks to match the macho appeal of marketleader Thums Up by taking a fizzier avatar.
The attraction of the enormous Indian market has forced quite a few iconic brands to tweak their global strategies, McDonald’s being a prominent example. In an acknowledgement of India’s growing consumer power, PepsiCo India has tweaked the taste of its flagship drink in Andhra Pradesh to match the strong taste of Thums Up. The state is among the top three soft drink markets in the country.
A PepsiCo spokesman said the base formulation of the drink hasn’t been changed while increasing the amount of carbon dioxide to make it fizzier. “Our research has shown that consumers in AP are evolving, and like fizzier taste. We constantly evolve our products to suit consumer preferences,” the spokesman said.
The spokesman declined to give specifics of the tweaked formulation and the percentage of carbonation and sugar content that had been altered. PepsiCo is not planning to launch the fizzier drink in more markets anytime soon, he said.
Not everyone thinks this is a great idea. “I don’t think changing the carbonation is going to help PepsiCo. In fact, the company may run the risk of alienating its existing customers,” said Ramesh Chauhan, who created Thums Up over 30 years ago.
Industry experts share Mr Chauhan’s scepticism. “A cola brand’s character is its ingredients—carbonation, sugar and the concentrate. Ideally, Pepsi should have introduced a different variant or brand to counter competition,” said a cola industry veteran, requesting anonymity.
This is the latest in a series of attempts by PepsiCo India, which is under pressure from its New York-based parent, to break Thums Up’s leadership position in India’s Rs 7,500-crore soft drink market. TARGET ANDHRA
AP buyers fond of Thums Up’s strong taste, which goes well with local spicy food
Base formulation of Pepsi hasn’t been changed, only CO2 content has gone up Fizzier Pepsi only in AP for now
THUMS Up, owned by Coca-Cola Company that also owns the world’s largest-selling cola Coke, has close to 16.4% share in the country’s aerated drinks market, compared with Pepsi’s share of around 13%, according to AC Nielsen data.
The fizzier Pepsi has already been launched in AP, a traditional stronghold of Thums Up, which has a dominant 80%-plus share.
Industry observers see this as yet another attempt by PepsiCo to break Thums Up’s hold in the AP market. A few years ago, PepsiCo had acquired its franchisee bottler CK Jaipuria’s bottling operations in Hyderabad to sharpen focus on sales and distribution in the region. The rest of the bottling operations in AP, however, remain with the Jaipuria family.
PepsiCo recently signed on local actor Ram Charan Teja to endorse its mainstay cola brand in AP to improve its local connect in the state. The company said it plans to roll out an aggressive marketing campaign in the region, which would feature Ram Charan and Deepika Padukone, as part of its ‘Youngistan’ communication. Thums Up is endorsed by Telugu superstar Mahesh Babu.
Consumers in AP are fond of Thums Up’s strong carbonation taste since it goes well with the local spicy cuisine. Coca-Cola’s strong sales and distribution network in the state also contribute to the drink’s popularity.
PepsiCo, which trails Coca-Cola in terms of overall market share in India, is watching the development closely. It expects the fizzier drink to deliver growth in India, a key emerging market for the company, said an industry analyst who did not wish to be named.
The soft drink category in India has been witnessing double-digit growth rates over the past few quarters.