The Fizzy History of India

Who doesn’t love a sweet and fizzy soft drink? We all consume some or the other soft drink on a daily basis. But, did you know the fizzy history of India? Here, we’ll talk about the history of soft drinks starting from the late 1830s to 2021, and How the soft drink market changed over the course of almost 2 centuries in India.

Let’s travel a bit back in time!

1837

This was the year where it all began for India. In 1837, the first-ever soda plant was set up by a chemist – Henry rogers. They sold nothing but carbonated water or as we call it today, Club soda.

Soon after the launch, India fell in love with this tingling, bubbly, fizzy beverage and Rogers saw success.

Looking at the success, other players wanted a piece of the pie but it took almost 30 years for other competitors to enter the aerated drinks business.

1865

In 1865, a new soda- Pallonji’s soda was launched and people fell in love with its raspberry flavoured fizzy beverage and it was an instant success. Looking at it, other Parsi businessmen were eyeing the soft drink market.

1884-1893

In 1884, Ardeshir’s soda was launched which mimicked Pallonji’s soda and was also successful.

Again in 1889 duke’s soda was launched with similar flavouring and it was also a success.

Meanwhile, in 1886 a major future competition was coming up in the USA. Coca-Cola launched its first-ever cola drink and it was loved by Americans. It had a monopoly in terms of cola beverages.

In 1893 another major cola brand – Pepsi was launched which was a major threat to Coca-Cola.

Meanwhile in India, Goli soda/Banta were gaining momentum and was becoming popular as well.

The local brands were competing with each other and there wasn’t much competition from overseas brands.

Jump to post-independence India.

1947 onwards

After India became independent from British rule, Coca-Cola and Pepsi who had already established themselves in the international market were looking to enter India.

In 1949, Parle wanted a piece of the soft drinks market and launched India's first-ever cola beverage named Gluco-cola which was later changed to Parle-Cola. But it got into a tussle with Coca-Cola over the use of the word cola since Coca-Cola had already trademarked the word cola. After almost 2 years of tussle with Coca-Cola, Parle discontinued the beverage in 1951.

Now, the market was all clear for Coca-Cola and Pepsi, But parle still wanted to continue its soft drink business and launched Gold spot. An orange flavoured soda in 1952.

Over the next decade, Coca-Cola became the preferred cola beverage and Pepsi was losing on market share and their sales were declining. Hence, in 1962 Pepsi decided to exit the Indian market as it was losing its grip.

Parle knew that it wouldn’t be able to compete with Coca-Cola. So, they never launched a cola beverage instead they launched Limca, a lemon flavoured soft drink in 1971.

But all was not going to be well in future.

1973 Onwards

Come 1973, India declared an emergency and the Foreign exchange regulation act was implemented which stated all foreign companies or branches should bring down, the foreign equity shares to 40% or less.

This was trouble for Coca-Cola and they had to reduce their market share.

While Coca-Cola was losing its grip on the Indian market, Parle was gaining momentum and in 1976 it launched a mango flavoured soft drink – Maaza. Maaza was an instant hit.

The political scenario in India was changing rapidly and it only meant trouble for Coca-Cola.

1977 Onwards

There was a shift in political powers in the country and the new regime was focused on nationalism and promoting local products over foreign brands.

The new government asked Coca-Cola to dilute its stake to 40% and also give up their secret formula if they wanted to continue in India.

The government knew that Coca-Cola would never give up their secret formula and they would be forced to leave the country.

With the exit of Coca-Cola, Indians were still craving the sweet, fizzy, cola drink. The government of India saw this opportunity and launched its own cola brand named Double 7 (77) to mark the year of change.

Double 7 didn’t taste anything like Coca-Cola and it was not able to do well in the market.

Parallelly, Pure Drinks who was the then Bottler for Coca-Cola saw this opportunity and started selling Campa-Cola. Campa-Cola’s branding, logo and taste was as close to Coca-Cola as one can get and Campa-Cola was successful to capture a decent amount of market share.

Remember how Parle never bothered entering cola market because of Coca-Cola? Well, now the market was open and Parle took this opportunity to make its own cola brand. But they didn’t want to mimic the taste of any other colas. Instead, they focused on making their own unique formulation made by local Indian spices and ingredients and launched a new Cola brand- Thums-Up. This new cola suited Indian taste buds more so than any other cola flavoured beverages and it was an instant hit.

Now, there were two major rivals in the Cola Industry, Campa-Cola and Thums-Up. Campa-cola engaged in a pricing war by reducing the price of their product but Thums-up adopted a different strategy. Instead of reducing the price, they increased the bottle size from 200 ml to 250 ml and marketed it as ‘Maha Cola’. The aftermath of this was that Thums-up became the Market leader.

For the next decade, Thums-up continued being the undisputed king of Cola industry. In this decade Parle spent aggressively on marketing to counter local brands like Torino, Sosyo, Thrill, etc.

1988 Onwards

Towards the end of the 1980s, India was consuming a staggering 3 Billion bottles of soft drinks and it was way too tempting for Pepsi and it tried to enter the Indian market again. After a lot of debates in parliament, Pepsi was allowed to enter the Indian Market under the new economic policy.

Pepsi signed a joint venture with State-owned Punjab Agro and Voltas which was owned by Tata. Pepsi had a 39% stake in this JV with an investment of $14 million.

In 1990, Pepsi officially re-entered the Indian market after 28 Years of absence. But now the market had changed drastically. Thums-up was the undisputed king and was spending aggressively on marketing to hold its position.

Now looking at the entry of Pepsi in the Indian market, Coca-Cola wanted to do the same. And with a new government in place with a focus on economic upliftment, The earlier policy of 40% foreign investment limit was raised to 51% and Coca-Cola re-entered the Indian Market.

Coca-Cola faced tough competition from Parle owned Thums-up.

As we all know, Thums-up was the undisputed king of the cola industry in India. But there was a flaw in the business model of Parle. They had 62 bottling plants. Out of these 62 plants only 4 were owned by parle and the rest 58 were franchises. Coca-Cola figured this flaw and lured these franchises to work with Coca-Cola instead of Parle. Parle lost its bottling plants and also its market share.

Looking at this loss, parle agreed to sell its soft drink business to Coca-Cola in 1993 and overnight Coca-Cola became the Leader of the soft drink industry.

Coca-Cola had plans to kill its main competition- Thums-up and replace it with their own Cola. They had already replaced Gold-Spot with Fanta and Limca with Sprite.

Coca-Cola reduced the budget of Thums-up, reduced its production and started giving incentives to retailers to sell Coca-Cola instead of Thums-up with an expectation to increase Coca-Cola sales. Instead, Indian consumers shifted to Pepsi and Pepsi’s sales started increasing.

To counter this issue, Coca-Cola brought back Thums-up and positioned it at forefront of the Cola war to fight with Pepsi.

In a similar fashion, to gain more market share Coca-cola brought back Limca in the early 2000s.

2000 onward

The next decade, Thums-up remained the King and enjoyed the highest amount of market share in the soft drink Industry until 2013.

In 2013 Sprite took over the position of the market leader and Thums-up has maintained the second position.

Current Scenario

Currently, Coca-Cola owns approximately 50% market share in the soft drink industry and is the undisputed king.

Although there have been a few local players who are trying to enter the market but no one comes close to Coca-Cola in terms of market share.