The US cola and snacks maker is using similarly popular words in seven other languages —Punjabi, Marathi, Guja... Read More

(This story originally appeared in on May 4, 2017)

NEW DELHI: In perhaps a first for any multinational in the country, PepsiCo has started regional language labelling on its beverage cans and bottles in a bid to attract local consumers and take on fiercely competitive regional rivals.

Pepsi cola bottles and cans sold in Hindi-speaking areas, for example, sport words such as ‘bindaas’ and ‘dhamaal’ written in Hindi.

The US cola and snacks maker is using similarly popular words in seven other languages —Punjabi, Marathi, Gujarati, Bengali, Tamil, Malayalam and Telugu — on Pepsi bottles and cans sold in those states.

“We are giving local relevance to our packaging and messaging,” said Vipul Prakash, senior vice president for beverages at PepsiCo. “India has the advantage of multiple languages and we want to leverage that connect with our consumers,” he said.

Industry watchers said the move could also be aimed at warding off increasing competition from local beverage brands such as Bovonto, Xalta, Fresca, Jayanti Beverages and Hajoori & Sons.

These brands have been chipping away share of multinationals PepsiCo and Coca-Cola by selling at least 20% cheaper and focusing on deep distribution in local areas. While individually, regional brand shares are minuscule, together they are estimated to have 8-10% share in the Rs 22,000-crore carbonated soft drinks market in the country.

Prakash, however, said the move was not aimed at competing with local brands. “It is about connecting with young consumers in languages they are closest to,” he said.

The exercise at micro-localisation kicked off two weeks back and is in the process of being scaled up across markets. Prakash said the company would use its packaging to communicate different messages for different brands. He, however, said there was no decision yet on whether localised packaging messaging would be extended to other brands such as Mountain Dew, 7 Up and Mirinda carbonated drinks, and Tropicana juices.

The initiative is perhaps a first for global consumer goods firms, which have so far mostly resorted to localisation mainly through regional language advertising and promotions.

Regional packaging involves higher backend costs, but officials at PepsiCo said the costs were not steep.

Marketing and brand consultant Harish Bijoor said the move may help PepsiCo deal with local challenges and setbacks such as the recent boycott by traders in Tamil Nadu. “After what Tamil Nadu did to colas, this kind of move is an intelligent way of saying ‘I am what you are’,” Bijoor said.

“Labelling in local languages has an emotive appeal and it’s not like the earlier times when brands could make do with random attempts at localisation.” Two months back, trade associations in Tamil Nadu had called for a boycott of sales of Pepsi-Co and Coca-Cola, citing issues such as “exploitation of the state’s water bodies” and the “need to promote locally made soft drinks”.

It had led to combined sales of PepsiCo and Coca-Cola brands slumping 40% in Tamil Nadu within three weeks. “The boycott in Tamil Nadu affected our volumes, but now we are pretty much close to normal,” Prakash said. Rival Coca-Cola has responded to regional competition by stepping up distribution penetration and selling its brands in Rs 5 cups through vending machines. The carbonated soft drinks category in the country has been struggling with near-flat growth, impacted by lower discretionary spending, consumers’ increasing preference for ‘healthier’ drinks such as juices and flavoured waters, and higher taxation.