Can Ethnic Beverages Take On The Colas In India?

Paper boat tries to sail fast where the winds blow for colas.

Paper Boat, a fledgling brand from Bangalore-based Hector Beverag-es, is aiming to hold its own in the country against global giants like Coca Cola and Pepsi. But can traditional Indian drinks really give popular colas and juices a run for their money?

When Neeraj Kakkar, a Coca-Cola executive set up Hector Beverages, competing with the cola giants was the last thing on his mind. Kakkar zeroed in on the beverages market simply because it was familiar territory. Eyeing the growing popularity of functional beverages worldwide, he felt it had potential in India too.

Yet today, Kakkar sees himself and Paper Boat as “protectors” of traditional Indian beverage recipes. “At Hector Beverages, we believe that if we don’t do something now, these recipes will disappear in the next 2030 years.”

Management consultancy firm Wazir Advisors estimates India’s the unorganised market for ethnic beverages at $200-250 million, while the organised market is barely 1% of this. Paper Boat is a dominant brand in this segment with the widest range of flavours. Others include Dabur India, PepsiCo, Coca-Cola and Parle Agro, which offer only one or two flavours — primarily mango or lemon.

V.T. Bharadwaj, managing director at Sequoia Capital that is an investor in Hector Beverages, points out that unlike the US, where colas dominate, India scores on ethnic beverages. “India has a rich history of traditional beverages and it’s a shame that no one has tried to present them in an attractive and aspirational manner.” According to Bharadwaj, branded ethnic beverages is a market “that is waiting to explode and has the potential to break the back of the cola market.”