Let the Cola Battle Begin.....

The beverage market is getting tougher, with the coming of a new entrant, Big Cola has joined the soft drinks market, threatening to give Coca Cola and Pepsi Cola a run for their money.

Backed with heavy cash – N5 billion from AJE Group, a multinational beverage company with headquarters in Lima, Peru – Big Cola is set to battle Coke and Pepsi for the Cola market.

Its entry into the market a few weeks ago, is, however, eliciting a lot of interest from brand analysts.

In a report by Ventures Africa, expectations are high that the production of the soft drink in variants is expected to further deepen competition in a market segment currently dominated by Coca-Cola, Pepsi and La Casera, among other carbonated drinks in the country.

While Big Cola comes with enormous global brand weight, the view that it will dwarf existing brands has been premised on various indicators. One of is that Big Cola has presence in over 20 countries in Latin America, Asia and Africa.  Another is that with 25 years of experience, AJE is the 10th largest soft drink company in sales volume and the fourth largest producer of carbonated soft drinks in the world. As a result, “a company whose vision is to be one of the top 20 multinational enterprises by year 2020,” analyst said, “could become a major and worthy opponent of a top multinational company like Coca-Cola.”

With 55 billion of all kinds of beverages consumed each day (other than water), 1.7 billion are Coca-Cola trademarked/licensed drinks. Also, Pepsi, Mirinda, Fanta are global brands with high networth and strong consumer base, analysts at Ventures Africa believe BIG COLA, could give Coca Cola a good run for its money,  especially in Nigeria.

“AJE is one of the largest multinational beverage companies. AJE was also a first mover into PET bottles, which are ubiquitous today. Not only were these bottles cheaper,  they were lighter and less fragile, making them much less expensive to buy, use, and distribute. AJE group therefore produces its own plastic bottles, which provides a low-cost alternative to glass returnable bottles and has helped brands like Big Cola compete with bigger names like Pepsi and Coca-Cola,” analyst in Venture Africa wrote.

In spite of that, AJE Group is not ready to match the big brands in terms of advertising and marketing spend but what is crucial is slow-but-steady market penetration. The Country Manager, Mr. Theo Williams, told The Nation that it would not do much on advertising. Williams said the company will use more of direct and personal selling and pricing strategy. This move is seen by analysts as a plausible marketing strategy.

”Coke spends a lot on advertising in Nigeria while AJE typically avoids. Based on experience in other countries, their competitors offer promotional prices and increase spending on advertising. However, this only works for the short term because consumers who cannot afford this revert to AJE’s brand once the promotional prices are withdrawn. This could mean that Coca-Cola in Nigeria will be losing customers to BIG COLA in the future,” an analyst said.

One of the strategic advantages AJE group brings to fight first entrants in the market is pricing. A BIG COLA 65cl is sold for N90 against Coca-Cola’s 50 cl for N100 which will be affordable for most Nigerians.

Also, in an era where consumers are running away from sugar, caffeine and aspartame in other carbonated drinks because of rising health-related challenges, BIG COLA comes to the market with caffeine-free to appeal to both adults and children.

But with the entry of BIG COLA, an official partner of English FA and Barcelona Football Club official drink, can the leading players in the market lose grip to the new entrant? Only time will tell.

Source: the Nation Online