Pepsi declares 'cola' war in Indonesia
Pepsi declares 'cola' war in Indonesia
JAKARTA (JP): After some years of absence in Indonesia, Pepsi-
Cola International (PCI) yesterday declared cola war on the "real
thing."
Lance Tanaka, president of PCI for the Asia-Pacific region,
told a press conference here yesterday that Pepsi was geared up to
increase its share of the country's carbonated drink market from
less than five percent now to 35 percent within the next five
years.
Sung Il Lee, PCI's Asia-Pacific marketing director, expressed
his optimism about reaching the target. PCI, known as PT Pepsi-Cola
Indo Beverage, the joint venture between PCI and the Salim Group,
has prepared innovative marketing strategies, he added.
He said that this weekend Pepsi will start a massive
advertising campaign for its main brands, such as Pepsi-Cola, Pepsi
Max, 7UP and Miranda Orange, on the five local private television
stations -- RCTI, SCTV, TPI, ANteve and Indosiar. The last belongs
to the Salim Group.
Pepsi had previously been franchised to the Mantrust Group in
1987 but the group, faced with huge debts in the early 1990s, then
sold their franchise license to the Salim Group in 1993.
Evaryanti Hutapea of the Salim Group said that her group has
a 51 percent stake in Pepsi Cola Indo Beverage, with PCI holding
the rest.
She also cited Pepsi Cola Indo Beverage's investment of some
US$17 million in two bottling plants in Semarang, Central Java and
in Cikampek, West Java.
The plant in Semarang, with an annual capacity of over 60
million bottles and cans, started its commercial production last
year. The other one in Cikampek, with an annual capacity of 250
million bottles and cans, will come on stream at the end of this
year, with an initial production level of 50 million bottles and
cans.
Competitor
Coca-Cola International, Pepsi-Cola's biggest competitor,
launched its first Indonesian-made advertisement on Tuesday night
and seemed unperturbed by the arrival of Pepsi.
"We have dominated around 90 percent of the carbonated drinks
market in Indonesia. It will not be easy to compete with us,"
Managing Director of PT Coca Cola Indonesia John Brady said.
The absence of Pepsi-Cola in Indonesia for three years has
provided Coca-Cola with more opportunities to tap the market
through cooperation with franchise restaurants such as Pizza Hut
and Kentucky Fried Chicken. In the United States, home to both
Colas, Pizza Hut serves only Pepsi.
Coca Cola, which has been sold in Indonesia since 1932, now
has 12 bottling plants and over 600,000 retailers, according to
Coca Cola's Public Relations Manager Jannus Hutapea.
Although the competition from Coca Cola will be very tough,
Lee said, Pepsi will be able to expand its market given the large
potential market of carbonated drinks in the country.
"For carbonated drinks, the per capita consumption in
Indonesia is only around 10 servings (per year) -- one serving is
about eight ounces or average size of glass," Lee told The Jakarta
Post. "It is very small compared with its neighboring countries
like Malaysia, Singapore and the Philippines."
Carbonated beverage consumption in Malaysia has reached 70
servings per person per year, in Singapore 170 and in the
Philippines 65. In the United States the number goes as far as 350
servings per person per year.
In Indonesia, the situation is a bit different because the
beverage market is still dominated by bottled water and
packaged/bottled tea, said Lee.
"But we believe that the experience and expertise of the Salim
Group on local markets will benefit us tremendously in tapping and
changing the beverage market," Lee said. (als/rid)