Why Lipton Ice Tea Relaunch Renews Rivalry Between Pepsi, Coca-Cola Manufacturers

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By Azeez Disu

Following the revived partnership between Unilever and Pepsico, Lipton Ice Tea was recently reintroduced into the Nigerian market to delight consumers.

Recall, in 2003, PepsiCo and Unilever formed a global 50:50 joint venture – Pepsi Lipton International – to manufacture and market Lipton Ice Tea variants in 67 countries.

The brand was reintroduced with increasing health awareness particular, young urban adults looking at healthier options such as ice tea among beverage consumers.

Interestingly, the brand is now under the care of Seven-Up Bottling Company Plc in Nigeria, a company that engages in the bottling and distribution of soft drinks like Pepsi, a strong rival of Coca-Cola in Nigeria. In the early 1990s when Pepsi International took over Seven-Up International, Seven-Up Bottling Company Plc introduced the Pepsi brand in Nigeria.

The two companies (markers of Pepsi and Coca-Cola) now have to compete in the Ice Tea segment to battle for the market share, basically with Lipton Ice Tea and Chivita Ice Tea, a brand which was formerly on the brand portfolio of Chi Limited before Coca-Cola acquired it.

The Lipton Ice Tea drink comes in a PET bottle with variants such as Peach, Lemon, Mango, and Green Tea and Orange while Chivita Ice Tea is available in two variants of lemon and peach. It comes in 1litre, 500ml, 315ml and 150ml pack sizes.

Excitingly, Ready-to-drink (RTD) tea has derived benefit from similar positioning to juice in Nigeria, in line with the growing health and wellness trend. Therefore, it is expected to continue to develop along the lines of “healthy” positioning, as most of these products are fruit-flavoured.

Euromonitor International, world’s leading independent provider of strategic market research, revealed that RTD tea consumers have shown more loyalty to local brands, which are often available at more competitive prices. Thus, Chi Ice Tea, which is packaged locally and widely distributed, gained a competitive edge over international rivals, especially during the recession.

The research added that Lipton Ice Tea remained the only international brand in the category in 2018. Although Unilever initially benefited from Lipton’s brand equity in hot tea, its RTD tea suffered from low visibility in the market.

Thus, the recent reintroduction now under the watch of Seven-Up Bottling Company Plc is set to change the market. However, industry watchers stated that the decision to relaunch the Lipton Ice Tea comes at a time when rival Coca-Cola completed the full acquisition of Chi Ltd, three years after buying 40percent stake in the juice and snack company.

It is worthy of note that globally Lipton is a British brand of tea, owned by Unilever. Lipton was also a supermarket chain in the United Kingdom before it was sold off to Argyll Foods, to allow the company to focus solely on tea. The company is named after its founder Thomas Lipton. The Lipton ready-to-drink beverages are sold by Pepsi Lipton International, a company jointly owned by Unilever and PepsiCo, the owners of the namesake product Pepsi.

A Case Study of Past Battles

Pepsi and Coca-Cola are known for the long battle called “Cola Wars”. Report has it that the brand owners have spent billions of dollars over the years to build dynamic and vibrant brands, with both brands boasting a huge global customer base.

According to Wikipedia, the long-time rival soft drink producers The Coca-Cola Company and PepsiCo have engaged mutually-targeted marketing campaigns for the direct competition between each company’s product lines, especially their flagship colas, Coca-Cola and Pepsi. Beginning in the late 1970s and into the 1980s, the intensity of these campaigns have led to them, and the competition in general, being known as the cola wars.

Due to recession in 2016 in Nigeria which led to the hike in prices of soft drinks, a new entrance then, Big Cola, disrupted the market with its pricing strategy which caused drop in sales of the two cola giants.

Pepsi responded with the introduction of the 60cl Pepsi “long throat” bottle with the launch of “Things I Long Throat For” campaign. The product was 20% more than the previous Pepsi bottle and priced at just N100, giving consumers more value for their money.

The campaign which was driven by the brand’s ambassadors (Wizkid, Tiwa Savage & Seyi Shay) generated a significant buzz on social media, trending for weeks with customers posting, tweeting and retweeting.

Thereafter, Coca-Cola responded, with the release of its own 60cl pet bottle. The company also unveiled the ‘Solo or Bigger Boy’ campaign, offering its customers a choice between the 60cl bottle at N150 and the 35cl bottle at N100. With massive advertising and publicity and because the bottle was so innovative, Coke appeared to regain some ground.

To also respond to Coca-Cola’s launch, Pepsi retaliated with a price reduction campaign tagged, “No Shaking, Carry Go” offering customers the 50cl Pepsi bottle at N100. Pepsi aggressively promoted its new offering across a few key markets. This campaign received a lot of radio airtime as well as massive promotional activities across its key locations and its brand ambassadors also helped promote the campaign. 

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