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'Bitter' twist in Spanish cola wars

06-Mar-2003

The rivalry between Coca-Cola and PepsiCo is legendary, but it is not restricted simply to their cola brands. Coca-Cola this week launched a new brand in Spain which is designed to compete with Bitter Kas, a PepsiCo brand which is the leader in the bitters segment there.

According to a report in the Spanish newspaper Expansion, the launch of Mare Rosso is part of Coca-Cola's ongoing programme of expanding its business in Spain and reducing its dependency on cola drinks. The company already sells a wide variety of products such as bottled water, fruit juice, sports and energy drinks there, and recently began marketing a range of products targeted at children.

 

The hope is that Mare Rosso will prove as successful for Coca-Cola as its Nordic Mist tonic water brand has been, the report said. That brand was launched in Spain in April 2000 in a bid to compete with market leader Schweppes. In the two and a half years since then, the Coke brand has garnered more than 17 per cent of the market, reducing Schweppes' share from 75 per cent to 66 per cent.

 

Coca-Cola España told the paper that the market for bitters in Spain was similar to that for tonic water - a mature market with sales in slow but steady decline. In 1999, sales were 40 million litres; last year they reached 18 million. The report claimed that this decline was primarily due to a lack of investment in the market on the part of PepsiCo, whose Kas brand accounts for more than 80 per cent of sales.

 

The ironic thing is that Coca-Cola already has a bitter brand in Spain - Drim - but this has traditionally been only a minority player in that market, accounting for no more than 5 per cent of sales. "Mare Rosso is a much more attractive product, which is targeted at adult drinkers in their 30s and to be drunk preferably as an aperitif," the paper quotes Coca-Cola as saying.

 

Mare Rosso will be available at the end of the month, and while it will be sold through all the usual soft drink retail channels, its principal market will be the hotel sector.

 

Coke has seven independent bottlers producing its brands at 15 different sites around Spain, and sells to more than 300,000 retail outlets there.