In November, the company won the title sponsorship to the IPL for five years, which starts on Wednesday, through its biggest ever sponsorship investment in the country.
And last week, the multinational announced its role as the “exclusive pouring partner” for eight out of the nine IPL franchises, meaning that its food and beverage brands will have a sole presence at its partners’ home matches. At the same time Pepsi will serve as the teams’ “official beverage”.
Just the beginning
While the Rs397 crore (US$73m) PepsiCo paid is hardly earth shattering by Western standards, it is enormous in the context of the Indian soft beverage industry, which is a long way behind that of even nearby countries. It also pales in comparison to the sheer cost and marketing power of the IPL, which is estimated to extend far into the billions of dollars.
The consumption of soft drinks in India hardly even registers on a global level—and is in fact among the lowest in the world. Indians on average consume six bottles a year, compared to 80 bottles in Thailand and 800 bottles in the United States. Delhi, however, has the highest per capita consumption in the country with 50 bottles annually, according to research company Technopak.
Doing battle
Pepsi occupies second place in the Indian carbonated beverages market, which is valued at Rs7,000 crore (US$1.3bn). Accounting for around 40% of the market, it still has some distance to go to reach bitter rivals Coca-Cola, with its iconic Indian brands like Thums Up!, which leads the industry with 55%. According to Technopak, the segment is growing at between 6% and 7% each year, so the gloves are off, and both majors are keen to enlist the biggest names in sport and showbiz to get their message across.
Reports suggest that PepsiCo expects the IPL to be worth five to six times its initial investment. To make the most of its sponsorship, it has devised an “Oh Yes Abhi” campaign that features cricket and film stars to promote the joys of living in the moment and instant gratification. Meaning “right now” in Hindi, Abhi is aimed at India’s large youth population and aims to make the most of the instant gratification nature of purchases of the drink.
By the same token, Coca-Cola is pushing its Facebook page and the Twitter handle of Bollywood superstar Salman Khan, who will be the face of its Thums Up! brand. The same initiative has been launched in the southern state of Andhra Pradesh—the largest market for Thums Up! in the country—albeit with regional film star Mahesh Babu as its face.
According to a report in Indian financial daily Business Standard: “Each year the two cola majors cumulatively spend around US$64m to US$73m on advertising, marketing and promotion, around 55% of which is earmarked for the summer months.”
Healthier habits
Away from colas, the two leaders will be fiercely pushing their fruit drinks, having seen a growing and significant shift towards fruit-based drinks, especially among young drinkers, who are increasingly more health conscious.
In this regard, Coca-Cola has signed on the very first brand ambassadors for its mango drink, Maaza and launched a new advertising campaign based on the “made with nature” tagline for its Minute Maid orange drink. Likewise, PepsiCo is making a push for its Slice mango drink and, in a worldwide first in the history of its Tropicana brand, introduced three flavours of fruit powders in India.
But India’s sheer support of cricket has traditionally at the forefront of drinks companies’ marketing efforts, and will remain to be so. The likes of sporting superhero Sachin Tendulkar professing “Pepsi, yeh dil mange more” still stays strong in the minds of cricket-loving soft-drinks fans over 10 years after he debuted in its TV advertising campaigns.
Even though Pepsi has splurged a sizeable proportion of its annual marketing budget on one domestic tournament, there is no doubt this is money well spent.
“Winning the title sponsorship [of the IPL] was just the beginning,” crowed Gautham Mukkavilli, CEO for beverages of PepsiCo India. Expect it to be backed by high-decibel marketing as the company makes the most of its investment.