In 1993, when Parle sold off a typically domestic brand to Coca Cola for $60 million, industry watchers thought that the Chauhans had hit an unanticipated jackpot – many had even believed then that the precocious brand would die in the short run... 17 years – and some portentous stymieing attempts – later, the brand Thums Up has not only become prodigiously iconic, but has spawned a staggering legacy that is spoken of with unanticipated awe. In a first of its kind series, 4Ps B&M maps the legacy of the brand Thums Up, with live inputs from the top honchos of Coca Cola and Parle
The year was 1977. Eight years had passed since Parle had purchased brand Bisleri from Italy’s Felice Bisleri and just one year since the launch of an unknown lemony drink called Limca. Ramesh Chauhan, along with brother Prakash and CEO Bhanu Vakil, were counting the days for the launch of their flagship soft drink – a carbonated cola drink. The brothers knew their job was tough. Per capita consumption of cold drinks (then) was worse than expected for an anyway below average market. But Ramesh Chauhan wasn’t that worried. He’d seen tougher times since the day he had started his career as an employee in an Indian post office. He knew he could work it out...
The American soft drink giant Coca Cola’s headquarters had just left India following the introduction of Foreign Exchange Regulation Act (FERA) whereby it was asked to reduce its equity stake to 40% even in their technical and administrative units (Coca Cola refused, and exited). And as the black cola market was bereaved by the sudden absence of Coca Cola, the Chauhan brothers, taking advantage of this void, launched Thums Up, which was an instant hit in metros (It was later launched on a pan-India basis in 1981). Since then, in 33 years, the brand has dethroned the leaders, outpaced the laggards, walloped the upstarts, horsewhipped the substitutes, and even changed hands (as is perhaps too well known, Ramesh Chauhan sold brand Thums Up to arch rival Coca Cola in 1993 for $60 million – a decision he doesn’t regret till date).
Circa 2010: Thums Up is India’s largest selling carbonated cola drink with a market share of 16.4%. Much has changed in the years that have gone by, but what has remained unchanged is the fiercely competitive battle between the major soft drinks makers. If today the warring factions include PepsiCo and Coca Cola, the late 1970s and early 1980s era saw the combatting battalions of Campa Cola (from the stable of Pure Drinks Ltd., which later also introduced Campa Orange) and Double Cola (a US-based soft drink). Despite that, the brand Thums Up still remains the market leader with Pepsi commanding 13% share and Coke 8.2%. Thus, from 1977 to 2010; from Parle to Coca Cola; from Sunil Gavaskar to Salman Khan to Akshay Kumar – ‘thunder’ has remained a durable proposition, outbeating many product life cycle theories by decades. And that’s the crux of this cover story – how in heavens does Thums Up keep stealing the thunder?
The year was 1977. Eight years had passed since Parle had purchased brand Bisleri from Italy’s Felice Bisleri and just one year since the launch of an unknown lemony drink called Limca. Ramesh Chauhan, along with brother Prakash and CEO Bhanu Vakil, were counting the days for the launch of their flagship soft drink – a carbonated cola drink. The brothers knew their job was tough. Per capita consumption of cold drinks (then) was worse than expected for an anyway below average market. But Ramesh Chauhan wasn’t that worried. He’d seen tougher times since the day he had started his career as an employee in an Indian post office. He knew he could work it out...
The American soft drink giant Coca Cola’s headquarters had just left India following the introduction of Foreign Exchange Regulation Act (FERA) whereby it was asked to reduce its equity stake to 40% even in their technical and administrative units (Coca Cola refused, and exited). And as the black cola market was bereaved by the sudden absence of Coca Cola, the Chauhan brothers, taking advantage of this void, launched Thums Up, which was an instant hit in metros (It was later launched on a pan-India basis in 1981). Since then, in 33 years, the brand has dethroned the leaders, outpaced the laggards, walloped the upstarts, horsewhipped the substitutes, and even changed hands (as is perhaps too well known, Ramesh Chauhan sold brand Thums Up to arch rival Coca Cola in 1993 for $60 million – a decision he doesn’t regret till date).
Circa 2010: Thums Up is India’s largest selling carbonated cola drink with a market share of 16.4%. Much has changed in the years that have gone by, but what has remained unchanged is the fiercely competitive battle between the major soft drinks makers. If today the warring factions include PepsiCo and Coca Cola, the late 1970s and early 1980s era saw the combatting battalions of Campa Cola (from the stable of Pure Drinks Ltd., which later also introduced Campa Orange) and Double Cola (a US-based soft drink). Despite that, the brand Thums Up still remains the market leader with Pepsi commanding 13% share and Coke 8.2%. Thus, from 1977 to 2010; from Parle to Coca Cola; from Sunil Gavaskar to Salman Khan to Akshay Kumar – ‘thunder’ has remained a durable proposition, outbeating many product life cycle theories by decades. And that’s the crux of this cover story – how in heavens does Thums Up keep stealing the thunder?
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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