To fight multinational competition in the R30,000-crore Indian beverages market, home-grown companies like Kishore Biyani-promoted Future Group and Rasna Beverages, part of Rasna Group, are tying up with international beverage majors for branding and licensing agreements.
To start with, retail major Future Group is getting ready to sign a deal with a California-based beverages company next week for its foray into the aerated drinks sector in India through the brand licensing route. According to industry sources, the company is in advanced talks with two global beverages companies, namely Shasta Beverages and California Soda Company, both based in California.
With this Biyani’s company hopes to compete with Coca-Cola India and PepsiCo India in the Rs 15,000-crore carbonated soft drinks sector in India.
Meanwhile, Rasna Beverages is in the process of finalising a deal with an European company to launch its beverages brands in India.
Yet another FMCG company Parle Agro, which re-entered the carbonated soft drinks sector in India with the launch of ‘Cafe Cuba’ is beefing up its product portfolio to take on its multinational rivals.
On the group’s plans, Future Group chairman Kishore Biyani said, “It’s a brand licensing arrangement that will mark our entry into the FMCG space in India. We would like to get into the league of the big aerated companies of the world.”
Biyani is increasingly focusing on the group’s FMCG business which was demerged into Future Consumer Enterprises, formerly known as Future Ventures. Biyani expects it to be a R1,000-crore company by this fiscal.
Cashing in on his mass appeal, Biyani is expected to opt for mass market strategy to promote the group’s aerated drinks business in competitive markets. “Biyani will surely introduce his fizzy drinks at affordable price points to reach out to a wider target audience. With his brand promotion strategy, Biyani will try to drive volumes in this sector,” an industry analyst with a domestic brokerage firm said.
Like Biyani, Rasna chairman Piruz Khambatta is betting big on mass market strategy to drive volumes in domestic markets. ‘’We are currently negotiating the modality of our arrangement with an European company. We are still in the process of it,” said Khambatta.
According to Khambatta, Rasna’s new product will be launched entirely in the foreign partner’s name as it has more premium brand recall in one or two categories. ‘’In other categories, we will have the branding of Rasna on some products,” he added.