Tata Consumer Faces Heat as RIL’s Campa Cola Shakes Up Beverage Market with Lower Prices!

New Delhi: Tata Consumer Products Ltd (TCPL) has acknowledged growing competition in the bottled beverages market, especially with the entry of Reliance Industries’ Campa Cola, which is creating challenges by offering products at lower prices.

“A new player entering the market with different price points disrupts the industry. While the consumer price may look the same at ₹10, the trade prices were very different. Big multinationals quickly adapted to this pricing, but we didn’t react fast enough,” said Sunil D’Souza, Managing Director and CEO of Tata Consumer, during the company’s earnings call. He was responding to questions about the challenges posed by Campa Cola.

Decline in Ready-to-Drink Revenue

On Friday, Tata Consumer revealed that revenue from its ready-to-drink beverages, including brands like Gluco Plus, Tata Fruski, and Himalayan, fell by 11% in the September quarter due to competition and unfavourable weather. Tata Consumer also operates a large packaged tea and coffee business.

Reliance Industries, led by Mukesh Ambani, bought Campa Cola in 2022, a once-popular brand, from Pure Drinks Ltd. Campa Cola, which is still being introduced in markets, offers more affordable prices compared to Coca-Cola and PepsiCo. For example, Campa sells 200ml bottles for ₹10, while Coca-Cola and Pepsi sell 250ml bottles for ₹20.

Tata Consumer has responded by lowering the price of its Tata Gluco Plus, and the company says early results from this move are promising.

Staying Competitive

D’Souza stressed that Tata Consumer is focused on maintaining its market share, saying, “We’ve adjusted our pricing and taken action. We expect to return to our usual growth of 25-30% by the end of this quarter.”

Reliance Consumer Products Ltd (RCPL) is also ramping up its efforts in the soft drinks market, expanding Campa Cola’s presence at cheaper prices compared to Coca-Cola and Pepsi. Analysts note that Campa’s use of PET bottles allows it to bypass the infrastructure needed for glass bottle collection.

Market Trends

D’Souza also commented on market demand, noting that while rural areas are recovering, urban markets are experiencing a slowdown due to factors like food inflation. He mentioned that the rural recovery could be strengthened by a good monsoon season, but the demand is not yet strong enough to drive double-digit growth.

Overall, consumer spending stress continues to impact the broader consumer goods industry, D’Souza said.