AJE Group, a multinational beverage company with headquarters in Lima, Peru has started the production and distribution of Big Cola, a new carbonated soft drink in Nigeria with initial investment capital of over N5 billion. The production of the soft drink in different variants of Cola, Orange and Lemon is expected to further stretch competition in the market, which is dominated by Coca-Cola, Pepsi and La Casera among other carbonated drinks existing in Nigeria.

Coca-Cola is everywhere. The iconic American brand is recognized instantly around the globe and sold in more than 200 countries including Nigeria. Of the 55 billion servings of all kinds of beverages consumed each day (other than water), 1.7 billion are Coca-Cola trademarked/licensed drinks. It could thus be safely said that 1.7 billion servings of Coke products are consumed everyday across the globe. Additionally, there are thousands of subsidiary beverages that one might have no idea is currently owned by Coke. If one was to drink one bottle per day, it would take nine years to try them all.

It is hardly a surprise that Coca-Cola has over 90 million likes against Big Cola’s 4 million plus likes on Facebook. The red and white Coca-Cola logo is recognised by 94% of the world’s population and reported that its name is the second most understood term in the world behind “okay.”

Big Cola, A worthy opponent for Coca Cola in Nigeria

AJE is one of the largest multinational beverage companies, with presence in over 20 countries in Latin America, Asia and Africa,  With 25 years of experience, AJE is the 10th largest soft drink company in sales volume and the 4th largest producer of carbonated soft drinks. A company whose vision is to be one of the top 20 multinational enterprises by year 2020 remains could become a major and worthy opponent of a top multinational company like Coca-Cola.

AJE was also a first movers into PET bottles, which are ubiquitous today. Not only were these bottles cheaper but they were lighter and less fragile, making them much less expensive to buy, use, and distribute. AJE group therefore produces its own plastic bottles, which provides a low-cost alternative to glass returnable bottles and has helped brands like Big Cola compete with bigger names like Pepsi and Coca-Cola.

Coke spends a lot on advertising in Nigeria which AJE typically avoids to cut costs. Based on experience in other countries, their competitors offer promotional prices and increase spending on advertising. However, this only works for the short term because consumers who cannot afford this revert back to AJE’s brand once the promotional prices are withdrawn. This could mean that Coca-Cola in Nigeria will be losing customers to Big Cola in the future. Furthermore, AJE group intends to sell a Big Cola 65cl at N90 against Coca-Cola’s 50 cl for N100 which will be cheaper for most Nigerians.

Coca-Cola contains sugar, caffeine and aspartame. The Big Cola has the edge over Coca Cola in terms of its composition since it is caffeine-free and makes it more preferable for adults and children.

Using Mexico as a case study, Coca-Cola and Pepsi seem unable to deliver growth in the way AJE does. AJE Group has been able to identify a target consumer group with specific reference to 70 percent of youth at over 80 million according to the managers of the new soft drink. They are able to penetrate traditional markets, through reduced manufacturing costs, expanding slowly but systematically to share customers with top brands. Coca-Cola do not seem to be sensitive to these step, which might prove perilous for the future.

Comments

Elsewhere on Ventures

Triangle arrow