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Bru goes one up on NescafeMasoom Gupte / Mumbai December 16, 2011, 0:38 IST

Hindustan Unilever’s brand has finally become the volume leader in the two-player instant coffee market, albeit by a slender margin.

It’s time for celebration at HindustanUnilever. Bru, its instant coffee brand, hasfinally overtaken its closest competitor,Nescafe, in terms of volume leadership.HUL’s sense of achievement isunderstandable as the competition in the Rs800-crore instant coffee segment has beenintense between the two players.

As per market research agency, Nielsen’s data sourced from the industry,Bru’s market share stood at 50.2 per cent year-to-date (January – October2011) as compared to its competitor, at 49.2 per cent. While HUL does notcomment on market share figures as a company policy, an email sent toNestle did not elicit any response.

Is Bru’s being the new market leader and its move towards upping the gameby bringing in new variants, brand ambassadors and even a coffee shopchain, all in a single year, a co-incidence? Arun Srinivasan, VP – beverages,HUL simply attributes the FMCG major’s renewed focus on Bru to the growthopportunities in the category being propelled by the emergence of a young,affluent and urban India.

Besides, the low-level of penetration of the drink also presents players withample opportunity to explore the space. Compared to tea penetration at 96per cent, coffee penetration is as low as 16 per cent. The brand's growth rate(year-to-date) of 25.6 per cent, ahead of the market (20 per cent year-on-year)only eggs them on.

And to continue on the growth path, Bru seems to have reverted to the oldestmarketing mantra – straddling the pyramid. In simpler parlance, offering aproduct at each price point and as Srinivasan’s puts it “a flavour for everytaste palette”. So at the start of the year, HUL launched Bru Lite, for those wholike their coffee light. Mid-year, around July, came Bru Exotica, a premiumrange of coffees for the well-heeled, well-travelled Indians who likeinternational flavours. Currently, the flavours being offered include those fromBrazil, Colombia and Kilimanjaro. With Exotica, Bru has entered the premiuminstant coffee market, with prices starting at at Rs 180 for 50 grams (Brazil)and going up to Rs 300 (Colombia).

And the latest addition to the portfolio is Bru Gold, a non-chicory coffee, a 100per cent coffee, for those who like their drink strong. With Bru Lite, Exoticarange and Gold, HUL has beefed up its portfolio which previous included iceand hot cappucino and the original, Bru Green Label roast and groundfurther.

For brand consultant, Harish Bijoor of Harish Bijoor Consults, introduction ofsuch variants by Bru is an attempt to add sub-segments to a relatively boringinstant coffee segment that has been quite stagnant. However, he alsoexpresses concern over Bru’s efforts leading to cannibalising of its ownsales. “I don’t think consumers are aware of coffee types or are as evolved,”says Bijoor.

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Promoting the brandIn this era of competition, no brand can afford to lag behind its competitors.So when Nescafe roped in Bollywood actors Deepika Padukone and PurabKohli late last year, Bru’s move to bringing in its own brand ambassadors,Shahid Kapoor and Priyanka Chopra was a matter of time. And a perfect wayit seems for “making the brand’s imagery premium and contemporary” asintended. The only problem, there is much common between the two brand’sintentions vis-a-vis their brand images – perceived young and glamorous likethe beverage itself. All in all the brand ambassadors simply even out the fieldwithout any room for differentiation.

A similar logic is echoed by brand experts when commenting on the carefullydesigned communication for Bru’s new variants. The ads devised for themhave been formulated keeping in mind the intrinsic qualities of the products.For instance, Bru Lite commercials use the theme of light moments sharedby friends, whereas Bru Gold speaks of living life 100 per cent (interpreted as100 per cent coffee as per tests carried out by the company). The Exotica adson the other hand have been designed keeping in mind the individualisticcoffee drinking experience and therefore use both the brand ambassadorsseparately. Such attention to detailing may be lost on consumers though whorarely pay attention to such nuances in advertising says Bijoor.

This year also saw HUL’s second foray into the services space. And afterKwality Wall’s ice cream parlours, Swirl came the Bru World Cafes. A spacethat its competitor Nestle has also dabbled in the past with Nescafe CoffeeParlours. While Nestle’s venture was discontinued, Bru views its own as“complementing their portfolio”. Currently, there are seven cafes operatingunder the chain in Mumbai and the company is in no particular hurry toexpand. Industry experts are divided in their opinion on the foray. On one handit can serve as a live station for advertising the brands and even as a point ofsale or even a virtual lab for testing out any new blends in future. On the other,it won’t be a major value or volume generator, a reason largely attributed toNestle shutting down its own coffee shops.

The big questions for the category now: how will these moves by Bru pay off?Will Bru be able to sustain its position as the volume leader? No one ishazarding a guess yet.