Coca-Cola and Pepsico feel threatened by regional brands of soft drinks as sales decline

While Fanta or Mountain Dew may be your favourite drink, you might have noticed of late, there are almost half a dozen of new brands of soft drinks in the market. These soft drinks are way cheaper than the ones produced by Coca-Cola and PepsiCo, the world's largest sellers of soft drinks.

Alarmed by sudden rise of the regional brands, the soft drinks multinationals are up on their toes to check the market orientation. They have formed teams who have been entrusted with duties to keep a track on these smaller brands.

"The teams looking at these brands are separate from the ones tracking rural markets or counterfeits," a top official from one of the cola companies told The Economic Times. There are at least 50 smaller brands operating in the potential soft drinks market that include Bovonto in Tamil Nadu and Jayanti cola made by Jayanti Beverages in Alwar to Xalta Cola made by a New Delhi-based company and Gujarat's Hajoori & Sons, which sells drinks branded Sosyo, Ginlim and Lemee, to City Cola sold by Delhi-based Rahul Beverages.

"Being a total beverage company that plays in enhanced hydration, packaged water, juice and sparkling categories, we recognise that there is need for us to do a lot more to become the beverage of consumer's choice for all occasions," the Coca-Cola spokesperson told ET.

Sales volume growth for both companies has been in the low single digits for the previous four quarters at least, according to the financial daily. Coca-Cola and PepsiCo have cut prices of drinks sold in 200 ml glass bottles to Rs 10 from Rs 12 in select small markets in a bid to boost sales. Coca-Cola has introduced smaller packs for regional markets priced as low as Rs 5.