Coca-Cola Taps Pharmacies For Its New India Health Drinks

After a herbal tea in Thailand, cocktail-mixers in Spain, and its first alcoholic drink being tested in Japan, Coca-Cola has launched nutrient-based and rehydration drinks in India as the world’s largest beverages maker continues to look beyond sugary sodas.

The maker of Coke last week launched Minute Maid Vitingo, a Rs 5 sachet of an instant drink mix fortified with vitamins and micro-nutrients “to address the issue of malnutrition”; and Aquarius Glucocharge, a glucose drink to combat exhaustion and dehydration, priced at Rs 10 for a 200 ml pack.

For about two years, Coca-Cola has been globally expanding beyond sugary aerated drinks as consumer preferences change towards healthier options. The sales of sodas in the world’s second-most populous nation and a Rs 33,000-crore market are expected to grow at an annualised rate of 3.4 percent by 2022, according to Euromonitor International. That’s half the pace of the previous five years. Levies on sweet carbonated beverages too have gone up from 32 percent to 40 under the goods and services tax.

And Coca-Cola is not alone to diversify. Its global rival PepsiCo too has been reducing reliance on sugary drinks by unveiling healthier products worldwide. Last year, PepsiCo India launched oats and a milk beverage under Quaker brand, and a Aquafina-branded vitamin-infused water.

Coca-Cola India’s effort is to tap into the small but high-growth health drink market, said Dhanraj Bhagat, consumer and retail partner at consultancy Grant Thornton India LLP. Prices will work well with the Indian consumer and make it more need-based, he said.

Nutrition, Hot Climate

Vitingo — fortified with iron, zinc, folic acid and vitamins A, B2, B12 and C — is aimed at mass consumption in a country where half the women suffer from anaemia and more than a third of the children below five are stunted, according to the Global Nutrition Report.

Glucocharge will help in rehydration in the nation’s predominantly hot tropical climate. The Rs 1,300-crore glucose drinks market is dominated by Kraft Heinz’s Glucon-D, followed by Dabur India’s Glucose and Wipro Consumer Care & Lighting Ltd.’s Glucovita Powder, according to Euromonitor International. Pharmaceutical company FDC Ltd. also makes rehydration dilutables Electral and Enerzal.

Vitingo and Glucocharge are among the many launches Coca-Cola plans, especially in juices. That’s a category expected to grow at 7 percent, twice the pace of sodas, in the next five years, according to Euromonitor International.

The maker of Maaza mango drink is testing a fruit juice-infused Fanta in Gujarat, T Krishnakumar, president at Coca-Cola India and South West Asia, told BloombergQuint. There will be more fruit drinks, he said.

Coca-Cola plans to invest Rs 11,000 crore in what it calls creating a ‘Fruit Circular Economy’ that will help it procure fruit pulp and juices locally and also create infrastructure to support it. Krishnakumar indicated that a local variant of Minute Maid using domestic oranges—called Minute Maid Santra—is also expected to hit the market soon.

Improving Reach

Coca-Cola, like its rival PepsiCo, has a deep distribution network in India, underscored by ubiquitous signboards and branded refrigerators. Its drinks like Coke, Thums Up, Maaza, Limca and Minute Maid can be found even in remote parts of the country.

With Vitingo and Aquarius Glucocharge, the cola major aims to expand its reach. That’s because both the products will also be sold over-the-counter at pharmacies. Some druggists in cities already sell Coca-Cola’s juices and sodas and it expects to bring more under its distribution chain. Coca-Cola has a reach of 2.5-3 million outlets, Krishnakumar said, and the sale of the new products through pharmacies will take it close to four million.

It’s an interesting foray into the fast-growing health segment by Coca-Cola, Arvind Singhal, chairman at brand consultancy Technopak Advisors, said. “Traditional colas and aerated drinks in India have lost their fizz, while healthy options have witnessed strong growth.”

Krishnakumar, however, said new launches are not because demand for sodas is slowing. Coca-Cola India’s sales volumes and value are still growing in double-digits, he said without giving details.

Ramesh Chauhan, the promoter of bottled water maker Bisleri who sold Thums Up to Coca-Cola, was more forthright. It’s no secret that colas are not growing, he said. “If you are not growing, you have to keep trying other things.”