Soft drink companies cut quantity by 17% on back of inflation
Beverage companies in Nigeria have reduced the quantity of soft drinks in their bottles by 16.6 percent amid soaring inflation rate that has continued to raise production costs while impacting their margins negatively, BusinessDay findings show.
Specifically, Coca Cola Nigeria Limited and 7up Bottling Company have reduced the sizes of their 60cl pet bottle to 50cl.
Coca cola, Fanta and Sprite, all from the stables of Coca Cola Nigeria Limited, now come in 50cl pet bottles instead of 60cl.
Similarly, 7up, Pepsi, Mirinda and Teem Bitter Lemon, produced by Seven-Up Bottling Company, have had their size reduced from 60cl to 50cl.
‘‘For a week now, the distributors have been delivering the 50cl bottles to us. They said the company is no longer producing the 60cl and the distributors hinted that the prices of the soft drinks will increase more because of the increase in cost of production,’’ Caroline Iroakazi, a supermarket attendant in Lagos told BusinessDay.
Inflation rose in September to a record high of 17.9 percent, the highest since October 2005, as food, electricity and other energy costs drove up prices in the country.
The inflation rate rose to 17.9 per cent from 17.6 per cent in August, the National Bureau of Statistics (NBS) said on October 14.
BusinessDay recent survey around different retail shops across Lagos metropolis such as Apapa, Ikeja, Oshodi, Gbagada, Ikoyi and Victoria Island, revealed that the 60cl pet bottles of these brands have been replaced with 50cl.
BusinessDay findings revealed that most consumers of other brands are now switching to Big Cola as its size remains untouched by the manufacturer.
BusinessDay survey at Gooddeal stores, Ajao Estate, Lagos, showed consumers were requesting more of Big Cola than other brands.
“A lot of our customers who used to buy Coca-Cola and even Pepsi shifted to Big Cola when Big Cola came out because the quantity was more and at the same price as the other drinks. They started rotating between Big Cola and Pepsi after Pepsi came out with the ‘long throat’ for the same price and then to Coca-Cola when they increased to 60cl but now, most of my customers are requesting for Big Cola”, a retail attendant at Gooddeal stores told BusinessDay.
However, at Goodies Supermarket, despite that the Big Cola is 15cl more in content than other soft drinks; most consumers still crave for Coca-Cola.
‘‘Coca Cola is still our most sold soft drink. Maybe customers might change to another soft drink tomorrow but for now, Coca Cola is still the preferred soft drink for so most of our customers”, Hannah Samuel, sales supervisor at Goodies Supermarket told BusinessDay.
The demand swing in Coca-Cola did not change at St Paul Shop, Apapa, as BusinessDay learnt from the attendant.
“Customers are request for Coca-Cola more than Pepsi and Big Cola now because of the brand. Coca-Cola is the king in this business and with their share of a coke formula, even the new designs they are coming up is drawing people to the product. Although some people still ask for Big Cola because of the size,” Amarchi Ukonu, a retailer at the shop said.
Another survey in Park and Shop revealed that consumers’ demands for the three brands are at par.
“Buyers ask for the three products. They all have what they like about the drinks. Those that buy Big Cola say it is bigger and contains no caffeine. People ask Coca-Cola because of the quality and Pepsi because it has little sugar,” said Judith Nwachukwu, Assistant Supervisor at Park ‘n’ Shop, Victoria Island branch said.
‘‘Most of our customers who used to buy Coca-Cola and even Pepsi are gradually shifting to Big Cola probably because of the quantity. Big Cola is still 65cl while the other soft drinks are 50cl,’’ said Joy Aputu, a retailer in a supermarket in Gbagada area of Lagos state.
Big Cola, a soft drink from the stable of AJE Group, a privatively-owned multinational beverage company with headquarters in Lima, Peru, gained entrance into the Nigerian soft drink market in October 2015, offering consumers more quality and quantity, selling 65cl at N100 against competitor’s (Coca cola and Pepsi) 50cl for N100.
Pepsi, one of the dominant brands responded to the competition two months later, with the launch of its new 60cl ‘Long Throat’ bottle retailed at the same price as its former 50cl bottle. Then, dominant brand, Coca-Cola, hit the market with a 60cl pet bottle. In a bid to stay ahead of competition in the soft drink market and also drive more sales for its products, Coca-Cola Nigeria Limited upped its ante in February, 2016, with the release of a 60cl pet bottle as a direct challenge to both the new entrant, Big Cola and Seven-bottling company’s ‘longthroat’ pet bottles drinks.
As the recession bites harder, it remains to be seen if AJE will reduce the size of their products and what innovation moves other soft drinks brands will make to entice their consumers and attract more patronage.
CHINWE AGBEZE