Cola war: Firms fight over chapman market

Determined, perhaps, to ensure its sustained dominance of soft drinks market in South West Nigeria, Rite Foods Limited, producers of the Bigi brands, has introduced Bigi Chapman to fight off Lacasera Company Plc Smoov Chapman, which has just begun to pick up in the market. Sensing the Bigi threat, however, Lacasera, few days ago, introduced a bigger version of Smoov, the 60cl bottle to match Bigi’s which also comes in 60cl bottle.

Having failed to compete with its Lacasera beverage in a market now dominated by Bigi brands – Bigi Cola, Bigi Apple, Bigi Tropical among others, as well as Ajeast Nigerias Big Cola and 7Up’s Pepsi, which are presently the leading brands in Lagos and other adjoining states of the South West, Lacasera had a few months ago, introduced Smoov Chapman which has gradually gained acceptance, reviving the company’s hope of reestablishing a presence it had lost.

However, just when it seemed like it has found a response to Bigi and other leading brands with Smoov, Rite Foods has once again applied its old technique of mimicking products of competitors to fight off such competition. It has introduced Chapman of its own.

It is a time tested strategy which has seen Rite Food emerge the dominant force in the industry, displacing the old time giant Coca-Cola, as well as Pepsi and even Ajeast’s Big Cola which it mimicked to break into the market.

Rite Foods had come into the market in 2008 with its Rite Sausage Roll, later introduced varieties of other sausage rolls with which it penetrated the market. And in 2016, a year after Ajeast launched its Big Cola brand, the company launched its own Bigi Cola. With already existing distribution channels, it pushed aggressively, taking advantage of Ajeast Forex challenges which affected its production at some point to become the new market leader in the South West region.

The debut of Ajeast’s Big Cola in 2015 had struck a blow to Coca-Cola and 7Up which until then, had unassailable dominance of the market. Big Cola had mimicked Coca-Cola in terms of taste and colour, but offering higher volume for less amount; it quickly cut into Coke’s market share.

A year later in 2016, Rite Food followed the same pattern to introduce its Bigi Cola and when forex challenges hobbled Ajeast, ensuring that its products were largely out of circulation for long periods, Bigi Cola seized the opportunity to launch itself as the new market leader and has not looked back since.

With Bigi Chapman recently introduced, Rite Foods is apparently looking to use the same strategy to ensure that Lacasera’s resurgence with Smoov is cut short. It may have initially held one advantage. Smoov Chapman had 50cl in volume; Bigi Chapman came in 60cl, expecting perhaps that volume could be a huge factor. But such expectation has been cut short as Lacasera has introduced 60cl Smoov Chapman.

“When we had only the small Smoov Chapman and Bigi Chapman, some people prefered to buy Bigi because it was bigger,” said Nasiru, a store keeper at Fatgbems, Isheri North, Ogun State. “But that has changed since Smoov Chapman came out with the big bottle.

Both products have similar taste, and nearly the same ingredients. Smoov has carbonated water and sugar as core ingredients; citric acid as acidulant; sodium benzoate as preservative; Sucralose as sweetener; blackcurrant, bitter orange, lime and lemon orange as flavour; E1450 and E445 as stabilizers and E150d, E129 and E110 as colours.

Bigi Chapman on the other hand has water, black currant, carbon dioxide, citric acid, E330, preservatives potassium sorbate E202, and sodium benzoate E211, flavouring – rosemary extract, thyme extract, stabilizers – gum, Arabic E414, and glycerol esters of wood rosins E445, Colours – Quinoline Yellow E104, Allura Red AC E129 and Sunset Yellow FCF110.

“Smoov Chapman is still more popular, that’s what most people buy,” said Kemi, a vendor at Ojodu-Berger, Lagos. “I don’t even see Bigi Chapman like that; it’s other Bigi products I have.”

It’s the latest twist in the ever dynamic Cola war, one that has seen industrial giants Coca-Cola abandon, largely, it’s 50cl glass and plastic bottles variety, apparently unable to keep up in the mass marketing race with the likes of Ajeast, Rite Foods and now Lacasera that have little encumbrances and are able to offer products at slim profit margins.

The Coca-Cola 50cl plastic bottle which sold for N150 apparently could not compete with 60cl Bigi Cola, 60cl Big Cola, 50cl Pepsi and Smoov Chapman – all of which sells for N100. Indeed, the only Coke brands still visible in the market are the 35cl and the 50cl Coke Zero, as well as the 50cl Limca which the company re-branded and reintroduced as a response to the changing dynamics, but all of which have failed to challenge the new industry leaders in Bigi, Pepsi and Big Cola in the South West.

The key factor in the Coke struggle is price. The smaller competitors who have fewer encumbrances are able to sustain production at slim profit margins. And in a struggling economy like Nigeria’s, quality and brand loyalty may count for little compared to price.

These are also highly elastic products,” noted Dr. Bongo Adi, Senior Lecturer at Lagos Business School. “Given relatively high inflation rate, concerned budget individual consumers will shift away from the higher end products to lower quality but more affordable varieties. The determining factor for consumers is affordability rather than quality.”

However, while it may seem obvious that Coca-Cola has been “defeated” given what is happening in Lagos and other South West states, the company still maintains strong presence in Eastern and Northern Nigeria.

Indeed, Coca-Cola, Sprite, Fanta as well as Pepsi and other products of 7UP bottling company remain popular in Eastern Nigeria. But in the South West, the gatecrashers like Big Cola, Bigi Cola, RCQ a product of Strongpack Limited for First Bev as well as Pepsi have taken over the market. Unlike Coca-Cola, 7Up has been able to adapt with its Pepsi 50cl Long Throat which is about the second most selling brand in the zone after Bigi Cola.

“Whenever a new product comes in, they use an aggressive price strategy to penetrate market, said Dr. Adi We dont know what is happening to the bottom line of those companies, because they are likely to incur losses at the initial phase while making efforts to penetrate the market. They may not mind losing profit margin.

“Established companies like Coca-Cola and the rest that command significant market share already have economy of scale, such that if it comes to a sort of prize war, they would still operate on lower margin and still be profitable because you have to look at their distribution channel which is nationwide. So they have dominant market shares which will not be taken from them easily.”