The battle for market leadership in the Carbonated Soft Drink (CSD) segment is getting more intense. In the past, the jostle for market share was between two heavyweights – Coca-Cola and Pepsi.
Interestingly, this rivalry dominated the CSD market space for years. However, happenings in recent times have shown that the frenzy around these two heavyweights is about to dissipate.
In the past, efforts had been made by several small players to win the hearts of consumers and market share. Sadly, these attempts were only an effort in futility as the firms were soon sent back to play on the fringes of the market.
Big Cola bottled by AJEast Nigeria Limited in Agbara area of Ogun State, backed by AJE Group, a Peru-based beverage multinational company, made sparing efforts at sharing the market space with the established brands.
However, this initial impression could not be sustained due to the domineering influence of the established brands in the CSD market.
Rite Foods, makers of Bigi Cola, made entry into the Nigerian market in 2016, at a time when the country was battling with economic recession which left most consumers cash-strapped.
Leveraging more volume at a lower price, Rite Foods introduced six flavours of Bigi drinks – Cola, Orange, Tropical, Apple, Bitter Lemon & Lemon, and Lime – into the market. In 2017, it made an entry into the energy drink segment with Fearless Classic and Fearless Redberry.
It also has a world-class factory located at Osasa Ijebu in Ogun State.
From photography to drinks
Rite Foods Limited was founded by billionaire businessman, Adebola Adegunwa, of the popular Adebola House on Opebi, Ikeja. It is a subsidiary of Ess-Ay Holdings Limited, the parent company coordinating and consolidating all the companies in the Group, namely, Fototek Industries Limited; Photo Palace Limited, a photo lab that offers for sale photographic equipment and materials providing services from 33 branches across the country; Prints Specialty Ltd, a printing company that utilises sophisticated printing technology in the printing industry, and Top Communications Ltd.
Adegunwa is also a former chairman of Sterling Bank plc.
From a humble beginning at Bola-Oguns Photo in Ebute-Meta, Lagos, he stepped up his game and became a big player in the photography business.
However, following the digital revolution in photography, Adegunwa decided to diversify into the Fast Moving Consumer Goods sector, which led to the birth of Rite Foods Limited.
The value pricing strategy
To cover for the scarcity of forex during the economic recession in 2016, the two big players in the CSD market increased prices of their 50cl bottles to N150. This did not go down well with millions of consumers who were battling with shrinking wallet.
After series of backlash from consumers, Pepsi introduced its much-publicised “Things I Long Throat For” campaign with the introduction of a 60cl Pepsi bottle. The new product was 20 percent more than the previous Pepsi bottle and priced at just N100, giving consumers more value for their money.
The “long-throat” campaign also saw the signing of A-list artistes such as Wizkid and Tiwa Savage to help drive sales and gain significant traction on social media. This also saw the hashtag “long throat” trending on social media platforms like Twitter for weeks.
Having lost significant market share with sales plummeting, Coca-Cola responded with the release of its own 60cl pet bottle. The company also unveiled the ‘Solo or Bigger Boy’ campaign, offering its customers a choice between the 60cl bottle at N150 and the 35cl bottle at N100. With massive advertising and publicity, Coke appeared to regain some ground.
Still basking in the euphoria of regained market share, Pepsi came up with a price reduction campaign tagged “No Shaking, Carry Go”, offering customers the 50cl Pepsi bottle at N100. With no plans to slow down, Pepsi aggressively promoted this new offering across a few key markets.
This campaign received a lot of radio airtime as well as massive promotional activities across its key locations.
Coca-Cola launched its “Mama di Mama” campaign, unveiling the “Mama” 1-litre bottle at the retail price of N200.
A check on informal retail points, particularly hawkers in the energy-draining Lagos traffic and street kiosks, suggests stronger carriage of Bigi drinks than any other brand.
As one of the ‘4Ps’ of marketing (along with product, promotion, and place), pricing is a key tool in a marketer’s arsenal, despite arguably being the most effective lever for driving profits.
Brands often shy away from increasing prices within a competitive market so that customers don’t defect to cheaper brands and they lose volume sales and therefore market share.
In just three years, Bigi has built a reputation that threatens its competitors, forcing them to give more value (for less) than initially offered.
The Bigi drinks which come in different variants have garnered patronage from consumers, owing to the fact that the product comes in a bigger 600ml (60cl) PET plastic bottle and costs N100, forcing other competitors to also adjust their price range.
Mike Ikechukwu, a Lagos-based consumer analyst, said the look, feel and taste of Bigi drinks rival any mass-market competitors produced anywhere in the world.
“They are that good. In fact, one can argue Bigi drinks taste more like real juice as opposed to ‘flavoured carbonated water’ taste of its rivals,” Ikechukwu said.
He said the distribution strength of Rite Foods is also worthy of note.
“They held the West African distribution franchise for Agfa products, where they honed their pan-Nigeria distribution acumen. Their foray into food sausage rolls first, and now beverages, is leveraging heavily on the pre-existing distribution infrastructure built decades before,” he said.
Also advantageous, it appears, is the fact that being owned and run by Nigerians, the managers of Bigi know how to “find their way” in the rugged Nigerian market better than their expatriate-led competitors. Bigi also has the colour of the Nigerian flag printed on its bottles, thus appealing to the emotions of Nigerians as a made-in-Nigeria drink.
Not yet ‘uhuru’ for Bigi
No doubt, the battle is not yet won as Coca-Cola is focusing its strategic energy on every other ready-to-drink beverage market asides soda. These include fruit and vegetable juices, value-added dairy, flavoured waters, iced teas, ready-to-drink coffee and, maybe, even alcoholic cocktails.
Recent moves by the soft drink giant point to the fact that it is still in the race. First is its acquisition of Chi Limited, the company with a near-monopoly in the packaged juice and value-added dairy markets in Nigeria.
The other is its $600-million planned investment in Nigeria from 2017 through 2020 targeted at expanding its ex-soda businesses.
Going by its history, Coca-Cola is poised to win every foreseeable war in the near to mid-term future.
But if against all odds Bigi persists as a “hindrance”, Coca-Cola has one strategic plan, a plan it has been forced to play on several occasions, which is to buy the Bigi drinks business off Rite Foods and incorporate Bigi into its drinks portfolio, thereby killing off the brand completely and strengthening its grip on the market.
How this would play out, only time would tell.
OLUFIKAYO OWOEYE
