To take on Reliance's Campa, cheaper Coca-Cola and Pepsi coming soon

PepsiCo and Coca-Cola are reportedly planning to launch lower-priced soft drinks, priced around 15-20% cheaper than their main brands, targeting regional markets. This move aims to counter the increasing competition from Reliance Consumer Products’ Campa brand, as reported by The Economic Times.

Reliance Industries has been aggressively pricing its Campa brand to disrupt the soft drinks market. In addition to lower prices, Reliance is offering retailers higher trade margins than its competitors, which is helping to expand its distribution network. This expansion poses a significant challenge to the dominance PepsiCo and Coca-Cola have enjoyed, with competition mainly from a few regional players.

Budget-friendly alternatives

To maintain their premium brand positioning and protect profit margins, PepsiCo and Coca-Cola are considering introducing budget-friendly alternatives, often referred to as B-brands.

Ravi Jaipuria, chairman of Varun Beverages—PepsiCo’s largest bottling partner in India—indicated that the company is prepared to introduce products to compete in this lower-priced segment. He noted that Campa presents “formidable competition” and could capture a share of the market, but expressed confidence in PepsiCo's strategies.

Returnable glass bottles

Coca-Cola is also responding to Campa’s pricing strategy by expanding the distribution of returnable glass bottles priced at Rs 10, particularly in tier-II markets. The company is considering launching additional regional brands that can be scaled based on demand. Currently, Campa sells its 200 ml bottles for Rs 10, while Coca-Cola and PepsiCo sell 250 ml bottles for Rs 20. Campa’s 500 ml bottle is priced at Rs 20, compared to Rs 30 for Coca-Cola and Rs 40 for Pepsi.

Although neither PepsiCo nor Coca-Cola has officially reduced their prices, they are implementing tactical promotions at local retail levels, including cross-promotions and bundling deals on quick-commerce platforms.

Regional competitors such as Chennai-based Bovonto, Rajasthan’s Jayanti Cola, and Gujarat's Sosyo Hajoori Beverages—where Reliance Consumer holds a 50% stake—are also notable players in the soft drink market.

Attractive trade margins

Reliance Consumer is offering distributors trade margins of 6-8%, which is higher than the 3.5-5% offered by other soft drink companies. This margin difference is a significant factor in attracting retailers to Campa over established brands.