ITC Blog

Monday, September 03, 2007

Frito Lay loses snack mkt share to ITC's Bingo

ITC's Bingo is giving Pepsi a run for its money. While figures are not official, industry estimates that both companies agree with, that Pepsi’s share in the Rs 2000 crore-snack market has dropped from 60-45% since the launch of Bingo. ITC's retail success has forced Pepsi to renegotiate commercial terms with the Future Group, which runs Big Bazaar.

Retail tie-ups, regional flavours and distribution muscle, have helped ITC hit a bull’s eye with its snack Bingo. In less than 6 months, ITC's Bingo has managed to grab 16% market share and it hopes to touch 50% in a year. Not an easy feat when your battling Frito Lay for shelf space. ITC's tie-up with Biyani's Future Group hurt Pepsi hard by forcing the company to look at a revision of its commercial terms with the retail giant. While it’s been a flyer of a start, Pepsi still leads the overall Rs 2000 crore branded snack market with over 45% market share.

Where ITC scores on distribution, Pepsi rides high on brand recall with Lays and Kurkure. But ITC says is confident of bridging the gap. Arch rival Pepsi on the other hand will increase focus on Lehar namkeen, a category where ITC is yet to bite into. Pepsi is looking to invest heavily on distribution. Apart from Rs 3 packs, to penetrate further, the company is looking at new retail points like STD booths and cyber cafes as well. The company is also looking is upping spends to make inroads into the southern market, which continues to be dominated by regional players.

Both players are now looking at cashing in on the festive buzz with new advertising and product offerings. Where ITC has 12-14 new flavours in the pipeline, Pepsi hopes to launch 8-10 different flavours this year. As competition picks up, consumers are going to be spoilt for choice.

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