Suffering from success: Can Reliance’s Campa keep up with demand?

Mumbai: In 1983, a teenaged Salman Khan boarded a yacht off the Andaman Islands with a group of young, happening folks and a red icebox filled with chilled glass bottles of Campa Cola. They pitch tents on a pristine beach, chanting ‘Campa Cola’ to an electric guitar. The ad exemplified all that was cool about the iconic soft drink of the 1980s; it was the drink of choice for the cool, urban rich, who sang in English and partied at sea like the Europeans.

That was until Pepsi and Coca Cola re-entered India in 1989 and 1993, respectively, effectively ending the era of homegrown soft drink brands.

Forty years later, everything has changed. Campa Cola is now just ‘Campa’. It was relaunched in 2023 by Reliance Consumer Products, Reliance Industries’ fast-moving consumer goods (FMCG) arm. The party boats in the ads have made way for traditional festivals, desi Indian sounds, and cheering cricket stadiums, with ordinary people sharing plastic bottles of Campa to the tagline ‘Naye India Ka Apna Thanda’ (New India’s own cold drink).

The son-of-the-soil, nationalist rebranding appears to have worked.

Campa and Independence, Reliance’s packaged water and consumer staples brand, are both expected to close FY25 with ₹1,000 crore revenue each, according to analysts tracking the company and a senior industry executive briefed on the details, who did not want to be named. “Crossing the 1,000 crore mark is no mean feat in just a year and half,” the executive told Mint. “Campa is already sold out for the summer.”

Campa’s success is starting to weigh on its longstanding rivals, analysts tracking the company say. Distributors and wholesalers of the brand that Mint spoke with agree. They requested anonymity; Reliance Consumer Products declined to comment.

“For the last three quarters, we have been highlighting the disruptive impact of Campa Cola,” Abneesh Roy, executive director (research) at brokerage firm Nuvama Institutional Equities, wrote in February. “This is finally in numbers. Campa is likely to clock ₹10 billion ( ₹1,000 crore) in FY25…it is almost 1/15th the size of Varun Beverages’ India business,” he noted. “Campa has garnered 10% plus market share in the sparkling beverages category in select states.”

Varun Beverages is PepsiCo’s India bottler, the company’s largest outside the US. In FY24, it made ₹14,703 crore from its India operations.

At the heart of Campa’s success has been its flagship product: the 200ml PET bottle, priced at just ₹10. Rivals Coca Cola and PepsiCo had abandoned this price point long ago, moving to ₹20 for a 250ml PET bottle. “In fact, the cheapest Pepsi or Coke you can get is the small glass bottle for ₹15,” one soft drink distributor based in Uttar Pradesh told Mint. “But that is not a convenient format. Glass bottles don’t work any more.”

Runaway demand

Reliance is no stranger to undercutting the competition on price and dropping entry-level prices for mass consumers. It has replicated this in its Independence packaged drinking water, selling 750ml bottles at ₹10 and 1.5 litre bottles for just ₹20. In contrast, category leader Bisleri sells only 500ml water for ₹10 and 1 litre for ₹20.

These tactics have propelled both Campa and Independence into the fast lane, despite studiously avoiding metro cities and affluent pincodes in favour of smaller cities and towns.

“I have never seen Campa anywhere in Mumbai except Sahakari Bhandar [a cooperative supermarket chain with affordable prices]. And there, too, it is usually a few dusty bottles lying in the corner,” one FMCG distributor told Mint. “But Tier I is not Campa’s focus area. They are selling like crazy in tier II, III markets.”

Last month, Campa announced a slew of sponsorship deals with fellow group company JioStar for this year’s Indian Premier League. Campa is one of IPL 2025’s lead sponsors while its sister consumer brands RasKik and Spinner debuted their summer ad campaigns during the tournament. “Compared to Pepsi and Coke, Campa is barely spending on advertising,” the senior industry executive quoted above added.

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In sum, Campa’s attractive pricing and the strategic advertising blitz has made it (and to some extent Independence water and RasKik juices) the hottest brand of the season. But now Reliance Consumer is struggling to keep up with its own successful demand creation.

Distributors and wholesalers Mint spoke with said they have been struggling with frequent delays in supply, limited stock, and a lack of other supporting infrastructure in the market.

“Growth in Campa is good, it is actually unstoppable,” one distributor from eastern India said. “I get calls from faraway areas for stock. But supply is a very big problem. In my area, supply can match only about 20% of the demand for Campa.”

Another problem for the general trade is the lack of refrigerators. Large beverage brands such as Pepsi and Coke install refrigerators with their branding in shops. “Their agents come and force the shopkeepers to take out all the Campa and other bottles from their fridge,” said the distributor from eastern India.

“We have been telling our partners to inform the company that we need Campa fridges in our area,” one wholesaler located in north India told Mint. “But the peak season has started and they have still not come.” The typical peak season for soft drinks and other beverages in India runs from March to June.

Their agents come and force the shopkeepers to take out all the Campa and other bottles from their fridge.
— A distributor

However, the biggest problem for those in the trade is the long wait times for fresh stock. “I get calls from far-off areas for Campa stock,” says another distributor based in the north. “The demand is such that these buyers are willing to send their vehicles immediately and pay up front. But there is no stock.”

Several traders said they face delays of anywhere between 20 days to up to 40-45 days in some cases. Distributors say they faced similar supply disruptions last season, as well.

Plugging gaps

On its part, Reliance Consumer has been scaling up its supply, adding new bottling plants across the country. In February, the company opened a new plant in Guwahati. Before this, Reliance Consumer relied on bottling partners across the country.

Despite the challenges, most distributors and wholesalers for Campa are keen to stick with the brand. The biggest reason: Reliance Consumer offers higher margins that the industry average to both traders and retailers.

On average, beverages tend to be a very low-margin business of 5-7% for distributors and up to 10-15% for retailers. Besides, most sales coalesce around the ₹10, ₹15, and ₹25 retail price, meaning profits for the sellers tend to be low in absolute terms, unless they can move a very high volume of goods.

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Campa’s traders told Mint they are getting up to 7-10% in margins while retailers are being offered as much as 25-30% in some areas. “Reliance has given all the profits to the customer and the distributor,” a third trader based in north India told Mint. “So we don’t have to do anything to push the product. You can see the impact. Pepsi and Coke’s sales agents are now finally going door-to-door to take orders from the trade personally.”

This wholesaler, who started selling Campa last June, told Mint his billings for the July-December period were roughly ₹54 lakh. “In the first three months of this year, I have already crossed ₹50 lakh in billings,” he gushed.

Yet, as one rather morose distributor pointed out, margins are of little value unless supply issues are fixed. “If I have to wait 1-2 months with my working capital blocked, what is the point of these high margins?” he said. “Taking and cancelling orders reduces trust in this market. If this happens again next year, I think I will have to switch to selling some other brand.”

Campa’s supply troubles may become an opportunity for rival incumbents to claw back lost market share. In March, both Pepsi and Coke launched competing 200ml PET bottles for ₹10 each.

However, distributors say there is little early traction. “They [Coke and Pepsi] have launched ₹10 bottles but these are zero sugar variants,” one distributor told Mint. “In our area, this no sugar product does not work. People do not like the taste.”

The global managements of both companies are prioritising zero sugar products worldwide. Since 2023, both Pepsi India (with actor Ranveer Singh) and Coke India (with actor Tiger Shroff) have focused their ad campaigns on their zero sugar flagship products.

New start

Just over two years old, Reliance Consumer Products Ltd (RCPL), has been making waves in the consumer space. Before 2022, the group’s brands were limited to private labels on the shelves of its network of supermarkets, including Reliance Fresh and Reliance SMART. In December 2022, it set up RCPL and began moving brands into it close to two years later.

The company operates as a subsidiary of Reliance Retail Ventures, headed by chairman Mukesh Ambani’s daughter Isha Ambani. Ketan Mody, a chartered accountant and longtime employee of Reliance Industries, is now the company’s chief operating officer.

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Since its inception, RCPL has grown to sell more than 25 consumer brands, a mix of its own brands and those it has acquired or is licensed to sell in the country.

Campa, which was among Reliance’s earliest acquisitions, was reportedly moved to RCPL along with other FMCG brands around September 2024.

In FY24, RCPL began a spree of deals, including buying intellectual property (IP) rights to forgotten, legacy brands, striking licensing deals with Sri Lankan consumer companies, and even buying a 50% stake in Gujarat-based beverages company Sosyo.

While Reliance Consumer bought out some companies including the struggling listed company Lotus Chocolate and condiments seller SIL Foods, in many of its other deals it has merely purchased valuable IP from smaller or long-struggling companies.

For instance, it bought Toffeeman, a confectionary brand owned by Mumbai-based contract manufacturer Sweet Confectionery Pvt. Ltd, founded in 1983, to produce goods for South Korean confectionary giant Lotte. Similarly, Reliance bought all the trademarks, IP rights, recipes and famed brands of The Ravalgaon Sugar Farm, a listed company headquartered in Nashik.

The conglomerate is no stranger to this strategy. Between 2020 and 2022, Reliance Retail took over the assets and stores of Future Retail, a now-defunct retail company that operated supermarkets such as Big Bazaar and Hypercity. Reliance eventually rebranded the stores while a bankruptcy court ordered Future Retail’s liquidation in 2024.

Reliance’s prized acquisition, Campa, was also defunct for several years before its 2023 relaunch. The previous owner, Pure Drinks Ltd, has been practically non-operational for the past few years as Campa Cola largely ceased production around 2001. Members of the promoter family have been mired in disputes over control of the business and other family assets. Reliance acquired the Campa brand from the company for just ₹22 crore.

Secret sauce

Aside from fixing Campa’s supply chain issues, Reliance Consumer’s next challenge will be to replicate this playbook for the other brands it has incubated and acquired in recent years. In official communication, the company has said it is focused on becoming a “total beverages business”, launching an energy drink under Campa and sports hydration variant under RasKik along with Spinner, a brand backed by former Sri Lanka cricketer Muttiah Muralitharan.

This year, despite its supply challenges, Reliance expanded Campa to the UAE. It also acquired the rights to sell Sri Lankan fruit beverage Sun Crush in India.

However, the other brands it owns will need a lot more money to revive their fortunes. Some are sub-scale, running in losses, or operating at rather anaemic margins. Others are yet to reach scale in the general trade, where Campa has found its success.

Take, for instance, SIL, a brand of sauces and other condiments that Reliance Consumer acquired in January; SIL was founded in 1951 and changed hands several times until it landed with Ajay Mariwala, managing director of B2B foods business Food Service India.

This year, despite its supply challenges, Reliance expanded Campa to the UAE. It also acquired the rights to sell Sri Lankan fruit beverage Sun Crush in India.

Mariwala had earlier founded packaged spices brand VKL Seasonings, which he sold to private equity firm True North in 2019. Company filings show SIL has been struggling to grow for a couple of years now. From ₹13.26 crore in FY21, the company’s total revenue fell to ₹7.18 crore in FY24; it has been in losses ever since. Mariwala declined to comment for this story.

Moreover, the senior industry executive quoted above said that while Campa Cola reaches more than 9 lakh retail outlets, that is still only 35% of all retail outlets and kirana stores selling soft drinks and other packaged consumer goods across the country.

In March, Mint exclusively reported that Reliance will roll out more brands in the next 18 months, but will need 3-4 years to make them available nationally.

“It is a mistake to assume Reliance Consumer is just selling Campa,” the senior industry executive said. “The company has its own brands under personal care [Petals, Glimmer] and home care [Enzo, myhome]. The idea is that a retailer does not need to go to anyone else to buy what he needs. Reliance can provide everything.”