Parle returns to carbonated drinks with India’s first fizzy coffee

By RJ Whitehead

- Last updated on GMT

Parle returns to carbonated drinks with India’s first fizzy coffee

Related tags Soft drinks Coca-cola Soft drink

Twenty years after it exited the carbonated soft drinks business, Parle Agro has now revealed it will return to the market with a coffee flavoured fizzy drink—a first for the Indian market.

Parle was behind some of India’s best known soft drink brands, including Thums Up, Limca, Gold Spot and Citra. But in 1993, the company sold them to Coca-Cola in a deal, supposedly worth in the region of US$40m, that also included a non-compete agreement for 10 years.

Brand builder

In place of carbonated soft drinks, Parle has over the 20 years built a Rs2,000-crore (US$322m) business of bottled water, fruit-based drinks and healthy snacks.

But before it sold to Coca-Cola, Parle brands had a 60% share of the soft drinks industry, and even today, Thums Up remains so strong as a brand that Coca-Cola has still not managed to make an impact on its locally developed stablemate’s position. This makes India the only market in the world in which Coke trails a group brand in market share.

Parle’s new product, Cafe Cuba, will roll out over the first couple of months of next year, and the company expects it will soon gain a 7% market share—and become a Rs1,000cr (US$161m) brand even within the first year to 18 months of its launch, according to the company’s founder.

In-house formulation

"We are creating a completely new category in the carbonated soft drinks space. The carbonated drinks market only has lemon, cola and orange flavours. So we thought this could stand out clearly,​" said Parle Agro managing director Prakash Chauhan.

The vision is to create a differentiated product and it took us 10 years to develop it​. It is also something that we developed completely in house, after carefully evaluating the market and the prospects for a coffee-flavoured soft-drink​.”

The carbonated soft drink business is highly competitive and Chauhan said the company would not compromise on pricing. 

"There is a slight premium on the product. We can't get into tighter pricing​," he said.

Related topics Markets Soft drinks Emerging Markets

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