CHAPTER 1

- Executive Summary

- Introduction

- Purpose of the study

- Scope of the study

- Objectives
 - Executive Summary

The soft drinks and beverages can be said to be as old as a civilization of man.

Soft drinks are known as refresher and man need to refresh him self in the time of his thirst,

fatigue & dullness.

The conventional Indian soft drink pattern includes Lemon juice. Butter milk, lassi

etc. With entry of British India got westernized and synthetic soft drinks, which were part of

the dominant life style of the western world came flooding into India.

The present Corporate Exposure and Learning was done in Nectar Beverages Pvt.

.Ltd, which is Franchise Owned Bottling Operation (FOBO) division? In this report

Section 1: Deals with Industry profile, Company profile and Product profile of the company.

Section 2: Deals with Competitive position and Consumption pattern of consumer on lemon

flavour soft drinks in Belgaum city.

Research is done through personal interview with questionnaire for both retailer and

consumers and found that 7UP has good market potential as compared to Sprite and

consumers prefer this brand because of taste and refreshing and they expect some more

improved taste so that it can compete more with Sprite. to the water, the result is a great taste,

but slightly boring beverage. Now, the bottler brings it to life by adding carbon dioxide, a

tasteless, odorless, natural gas, with a machine called a carbonator.

The government has adopted liberalized policies for the soft drink trade to give the industry

a boost and promote the Indian brands internationally. Although the import and manufacture

of international
 INTRODUCTION
 Coca Cola aka Coke was established in the year 1886 in Atlanta by a pharmacist
named Dr John S. Pemberton. 12 years later to this, Pepsi aka Pepsi Cola was
established in the year 1898 by Caleb Bradham in North Carolina and that is where
the struggle to surpass each other in the marketing efforts began.
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 Print
Reference this

 An industry analysis by Porters Five Forces reveals that the soft drink industry has historically
been favorable for positive profitability, as exemplified by Pepsi and Cokes financial
outcomes. Soft drink industry is very profitable, more so for the concentrate producers than
the bottler’s. This is surprising considering the fact that product sold is a commodity which
can even be produced easily. There are several reasons for this, using the five forces analysis
we can clearly demonstrate how each force contributes the profitability of the industry.

Threat of new entrants

Entering bottling, meanwhile, would require substantial capital investment, which would deter
entry.although the CP industry is not very capital intensive, other barriers would prevent entry.
Through their DSD practices, these companies had intimate relationships with their retail channels
and would be able to defend their positions effectively through discounting or other tactics.

It would be nearly impossible for either a new CP or a new bottler to enter the industry. New CPs
would need to overcome the tremendous marketing muscle and market presence of Coke, Pepsi, and a
few others, who had established brand names that were as much as a century old.

Companies that have a door to door distribution channel in place like snack companies could choose
to diversify into soda industry

Switching costs are low for consumers who risk very little by trying new brands or

Beverages
Barriers to entry are relatively high, though, with large advertising budgets and competitive brand
loyalty to big players like Coca-Cola and Pepsi

The drinks with high growth and high hype are non-carbonated beverages such as juice drinks, sports
drinks, tea-based drinks, dairy-based drinks, and especially bottled water

Bargaining power of buyers

through five principal channels: food stores, convenience and gas, fountain, vending, and mass
merchandisers (primary part of “Other” in “Cola Wars…” case)

Bottlers own a manufacturing and sales operation in an exclusive geographic territory, with rights
granted in perpetuity by the franchiser, subject to termination only in the event of default by the
bottler

 1980 Soft Drink Interbrand Competition Act preserved the right of CPs to grant exclusive
territories to their bottlers, giving less bargaining power to Bottler’s buyers because there is no
alternative supplier

Bottlers are locked into contracts that grant CPs the right to set prices and other terms of sale

Bottlers are allowed to handle the non-cola brands of other Cps at their discretion

Bottlers are also given freedom in choosing whether or not to carry new beverages introduced by the
CPs but cannot carry directly competitive brands

Competition for brand shelf space in retail channels gives some bargaining power back to buyers

Threat of substitute products

Through the early 1960s, soft drinks were synonymous with “colas” in the mind of consumers.

In the 1980s and 1990s Coffee, tea, water, juices, sports drinks, distilled spirits became more popular

Efforts to reduce threat:

Bottlers: Increased capital investment and development of management skills

Concentrate: diversification

Proliferation in the number of brands did threaten the profitability of bottlers through 1986, as they
more frequent line set-ups, increased capital investment, and development of special management
skills for more complex manufacturing operations and distribution. Bottlers were able to overcome
these operational challenges through consolidation to achieve economies of scale. Overall, because of
the CPs efforts in diversification, however, substitutes became less of a threat.

Bargaining power of suppliers

Sugar and water are main ingredients. Corn syrup became cheaper in 1980’s.
With an abundant supply of inexpensive aluminum in the early 1990s and several can companies
competing for contracts with bottlers, can suppliers had very little supplier power.

Coke and Pepsi effectively further reduced the supplier of aluminum can makers by negotiating on
behalf of their bottlers, thereby reducing the number of major contracts available to two. With more
than two companies vying for these contracts, Coke and Pepsi were able to negotiate extremely
favorable agreements. In the plastic bottle business, again there were more suppliers than major
contracts, so direct negotiation by the CPs was again effective at reducing supplier power.

Concentrate producers (CPs) negotiate directly with bottlers’ major suppliers -particularly sweetener
and packaging suppliers – to encourage reliable supply, faster delivery, and lower prices

Coca-Cola and Pepsi are among the metal can industry’s largest customers and maintain relationships
with more than one supplier, giving these suppliers less bargaining power due to the availability of
alternative suppliers

Metal cans make up the majority of the bottlers’ packaged product (60%), followed by plastic bottles
(38%) and glass bottles (2%)

Rivalry among existing competitors

Duopoloy

Attacking hinders profitability

Price wars resulted in weak brand loyalty and eroded margins for both companies in the 1980s. The
Pepsi Challenge affected market share without hampering per case profitability, as Pepsi was able to
compete on attributes other than price.

Industry is largely consolidated with two major players and a few smaller competitors like Cadbury
Schweppes, making the companies interdependent

International demand for carbonated soft drinks is growing, but domestic demand is slowing down
substantially

Exit barriers are high for bottlers with expensive equipment, moderate for concentrate producers

Advertising budgets are high, customers are influenced by brand perceptions

1: Why, historically, has the soft drink industry been so profitable?

a. Since 1970 consumption grew by an average of 3%

b. From 1975 to 1995 both Coke and Pepsi achieve average annual growth of

around 10%

c. American’s drank more soda than any other beverage

 d. Head-to-Head Competition between both Coke and Pepsi reinforced brand

recognition of each other. This assumes that marketing added to profits

rather than eating them up.

e. Very large market share. 53% in year 2000.

f. Average 10.65% net profit in sales for both Pepsi and Coke.

2: Compare the economics of the concentrate business to that of the bottling business. Why is the
profitability so different?

The fundamental difference between CPs and bottlers is added value. The biggest source of added
value for CPs is their proprietary, branded products.

Coca-Cola and Pepsi have both decided to operate primarily in the production of soft drink syrup
while leaving independent bottlers with a more competitive segment of the industry

a. Concentrate business: Concentrate producers were dependent on the Pepsi and Coke bottling
network to distribute their products. Starting and maintaining a concentrate manufacturing plant
involved little capital investment in machinery, overhead, and labor. Significant costs were for
advertising, promotion, market research, and bottler relations. Producers negotiated with bottlers’
major suppliers. One factory could serve the entire United states

b. Bottlers: Purchased concentrate, added carbonated water, added corn syrup, bottled it, and
delivered it to customer accounts. Gross Profits were high but operating margins were razor thing.
Bottlers handled merchandising. Bottler’s could also work with other non-cola brands.

From Exhibit 5, a typical concentrate producer’s gross profit is 83% compared to 35% for a typical bottler.
Similarly, pretax profit for a concentrate producer is 35% and it is 9% for a bottler. The COGS for a
concentrate producer is significantly lower than of a bottler (65% of Net Sales). Packaging is half and
concentrate is one-third of bottler’s COGS. In addition to higher COGS, bottlers are responsible fo
redelivering the product to the customers, which involve delivery personnel placing and managing the
CSD in the store. The associated costs are typically around 21%. On the other hand, the significant cost
for a concentrate producer comes from advertising and marketing expenses (39%). So the profitability of
the concentrate business is evidently higher, almost four times, than that of bottlers, even though
concentrate producers have pretty high advertising and marketing expense
Purpose of the Study

The main purpose of the survey was to visit the outlets in a particular sub route and get

as much information as possible. To know the competitive position of 7UP (Pepsi) with Sprite

(Coca cola) and consumption pattern lemon flavour soft drink of consumer the situation demands

a market analysis through survey which gives an over view of the market in quantitative terms.

The Indian Carbonated Beverage Industry is a very dynamic industry. The soft drinks

are the life style brands and are closely related with the consumer. The passion for cricket in

the country makes it unique market. The main ingredients of soft drinks are water, sugar, added

flavour, and carbonated gas. Though some channels like Bar and Restaurants run business

throughout year, for other channels the peak season is between February to June

Scope of the Study

The market survey for comparative study between 7UP (Pepsi) & Sprite

(Coca Cola) is doing in Belgaum city. The scope of study (survey) areas selected in Belgaum

city are Vadagaon,, Hindwadi, Deshmukh Road, Tilakwadi ,Camp area, Kirloskar Road,

College road, Neharu Nagar, Bustand Area, Shivbasava Nagar.

Dealers they will divide these areas depending upon their requirements. PepsiCo

is a world leader in convenient foods and beverages, with 2005 revenues of more than $29

billion and 153,000 employees. The company consists of Frito-Lay North America, PepsiCo

Beverages North America, PepsiCo International and Quaker Foods North America. PepsiCo

brands are available in nearly 200 countries and territories and generate sales at the retail level

of about $78 billion.

 Many of PepsiCo's brand names are more than 100-years-old, but the

corporation is relatively young. PepsiCo was founded in 1965 through the merger of

Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with

The Quaker Oats Company, including Gatorade, in 2001.

Objectives:

1. To study the competitive position of 7UP with Sprite

2. To study retailer expectation.

3. To study consumption pattern of the consumer

4. To know the most preferred lemon flavour brand

CHAPTER 2
CONTENTS

_ literature of review

_ Organization profile

- Organization chart

- Sampling

- Research Design

- Data collection methods

- Measuring tools

Literature of review

PepsiCo is a world leader in convenient foods and beverages, with 2005 revenues of more than

$29 billion and 153,000 employees. The company consists of Frito-Lay North America,

PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America.

PepsiCo brands are available in nearly 200 countries and territories and generate sales at the

retail level of about $78 billion.

 Many of PepsiCo's brand names are more than 100-years-old, but the corporation is

relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-

Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company,

including Gatorade, in 2001.

PepsiCo offers product choices to meet a broad variety of needs and preference -- from

fun-for-you items to product choices that contribute to healthier lifestyles.lifestyleslifestyles

SHAREHOLDERS

PepsiCo (symbol: PEP) shares are traded principally on the New York Stock Exchange

in the United States. The company is also listed on the Amsterdam, Chicago, Swiss and Tokyo

stock exchanges. PepsiCo has consistently paid cash dividends since the corporation was

founded.

CORPORATE CITIZENSHIP

At PepsiCo, we believe that as a corporate citizen, we have a responsibility to contribute to the

quality of life in our communities. This philosophy is expressed in our sustainability vision

which states: “PepsiCo’s responsibility is to continually improve all aspects of the world in

which we operate – environment, social, economic – creating a better tomorrow than today

Our vision is put into action through programs and a focus on environmental stewardship,

activities to benefit society, and a commitment to build shareholder value by making PepsiCo

a truly susta
PepsiCo’s beverage business was founded 1898 by Caleb Bradham, a New Bern, North

Carolina druggist, who first formulated Pepsi-Cola.

Today, Brand Pepsi is part of a portfolio of beverage brands that includes carbonated

soft drinks, juices and juice drinks, ready-to-drink teas and coffee drinks, isotonic sports drinks,

bottled water and enhanced waters. PBNA has well known brand such as Mountain Dew, Diet

Pepsi, Gatorade, Tropicana Pure Premium, Aquafina water, Sierra Mist, Mug, Tropicana juice

drinks, Propel, SoBe, Slice, Dole, Tropicana Twister and Tropicana Season’s Best.

PBNA manufactures and sells concentrate for some of these brands to licensed bottlers,

who sell the branded products to independent distributors and retailers. PBNA provides

advertising, marketing, sales and promotional support for its brands. This includes some of the

world's best-loved and most-recognized advertising.

In 1992 PBNA formed a partnership with Thomas J. Lipton Co. to selling ready-to-

drink tea brands in the United States. Pepsi-Cola also markets Frappuccino ready-to-drink

coffee through a partnership with Starbucks.

Anthony Rossi as a Florida fruit packaging business founded Tropicana in 1947. In

1954 Rossi pioneered a pasteurization process for orange juice. For the first time, consumers

could enjoy the fresh taste of pure not-from-concentrate 100% Florida orange juice in a ready-

to-serve package. The juice, Tropicana Pure Premium, became the company’s flagship

product. PepsiCo acquired Tropicana, including the Dole juice business, in August 1998.
SoBe became a part of PBNA in 2001. SoBe manufactures and markets an innovative line of

beverages including fruit blends, energy drinks, dairy-based drinks, exotic teas and other

beverages with herbal ingredients.

Gatorade thirst quencher sport drink was acquired by The Quaker Oats Company in

1983 and became a part of PepsiCo with the merger in 2001. Gatorade is the first isotonic

sports drink. Created in 1965 by researchers at the University of Florida for the school's

football team, "The Gators," Gatorade is now the world's leading sport's drink.

PepsiCo Beverages North America includes the United States and Canada.

PEPSICO INTERNATIONAL

Pepsi-Cola began selling its products outside the United States and Canada in the mid-

1930s, opening in the United Kingdom in 1936. Operations grew rapidly beginning in the

1950s. Today, PepsiCo beverages are available in more than 170 countries and territories.

Brands include Aquafina, Gatorade and Tropicana.

In addition to brands marketed in the United States, PepsiCo International brands

include Mirinda, Seven-Up and many local brands.

PepsiCo began its international snack food operations in 1966. Today, products are

available in nearly 170 countries. Often PepsiCo snack food products are known by local

names. These names include Gamesa and Sabritas in Mexico, Walkers in the United

Kingdom, Sina
Australia, Matutano in Spain, Elma Chips in Brazil, and others. The company markets Frito-

Lay brands on a global level, and introduces unique products for local tastes.

Statement of the Problem

As there is neck to neck competition between PepsiCo and Coca Cola brands the

situation demands a market analysis through Retailer and Customer which gives an over view

of the market in quantitative terms. The areas selected in Belgaum city are Vadagaon,,

Hindwadi, Deshmukh Road, Tilakwadi ,Camp area, Kirloskar Road, College road, Neharu

Nagar, Bustand Area, Shivbasava Nagar.

Statement of the problem is to know the competitive position of 7UP (Pepsi)

with Sprite (coca cola ) and consumption pattern of Lemon flavour soft drink of consumers

and also to study Retailers expectation. Dealers are visiting to outlets 3 – 4 time every week,

or depends upon the area. The company has to know the demands of the customers and their

preferred flavour brand it is done through by frequent visiting of Retailer, then came to know

the needs of the customer.

This survey covers all the dimensions that dealers consider while

carrying out their business. The aim of the survey was to visit the outlets in a particular sub

route and get as much information as possible.

ORGANIZATION PROFILE
 Necessity is the mother of invention. . Late Shri Modhubab Timblo, prominent

industriously & business entrepreneur of Goa, found that the soft drinks in northern part of

Karnataka are being supplied from out side the State. Hence he found the need of producing

soft drinks for people of Karnataka from the land of Karnataka and from the water of Karnataka

itself. Accordingly the dream of modern manufacturing plant came into reality in 1984 and

Nectar beverages Pvt.Ltd., a beverage plant was commissioned on the our skirts of Dharwad,

on the N.H.No.4.

Pepsi Co was founded in 1965. The CEO of Pepsi Co. is Mr. Neel Buhr and CEO of

Pepsi India is Mr. Raju Bakshi and CFO is Ms. Indra Noori. The employees’ strength is

1,53,000 and it operates in around 200 countries.

MISSION:

“We are committed to produce & deliver top quality product to our consumer. To be

the World’s Premier Consumer products focused on convenient foods and beverages. In every

thing we do we strive for honesty, fairness and integrity”.

 To achieve this every batch of incoming raw materials are checked for quality by our

Quality Assurance Department.


 We use only high grade sugar

 Apart from this, on line & final product checks are carried out at regular intervals.

 We purchase raw materials only from approved sources, approved by independent

laboratories of internal repute.


 The entire range of equipments is made out of superior grade Stainless Steel Material.

 We give special attention to

o Personnel Hygiene & Sanitation

o House Keeping

o Good Manufacturing Process

o Special attention is also given to keep the Factory Surroundings Clean &

Green by growing Lawn

NBPL:

Nectar Beverages Pvt. Ltd, Dharwad is a franchisee of Pepsi Co. Late Shri Madhubab

Timblo, Prominent Industrialist and business entrepreneur of Goa founded it in 1984.

Nectar Beverages belongs to big house of Goa, under the banner of Fomento Group.

The group deals in Hotel, Soft drinks and 100% F.O.Us of Mining in Goa, Karnataka and

Andhra. Mr. Prashant Timblo heads it, the idea son of the illustrious father late Mr. Madhubab.

Nectar Beverages has carved a special niche in the map of softdrnks in the country. Thus

enjoys the highest reputation in the soft drinks market for quality products of international

brand such as Pepsi, 7Up, Mirinda (orange), Mirinda(lemon), Everless Soda, Slice etc.

utmost care is being taken from the beginning of collection of the raw water till it

turns into a sophisticated flavour drink.

MARKETING ENVIRONMENTAL AUDIT

AMCRO ENVIRONMENT:

I. Demographic:

 Age: The Indian population has >50% people between the age group of

12-26 which is an opportunity to the company.


 Family size: Increase in Nuclear families acts as an opportunity to the

company.

 Family Life Cycle: Increase in number of DINK’s (Dual Income No Kids)

is also an opportunity.

 Gender: Doesn’t make any difference as such.

 Income: Plays a major role

 Occupation: Affects the buying behavior

 Education: Students are very potential customers.
II. Economic:

Price of the product and the credit period play a major part in running the

business.

The increase in disposable income of end consumers has definitely helped the company

to increase its sales.

III. Environmental:

90% of any carbonated beverage is constituted of water, which is a scarce

natural resource.
 IV. Technological:

The continuous efforts are on to reduce the cost of

production. V. Political: Politics may affect the business to some

extent. VI. Cultural:

Public has a good attitude towards company. Pepsi is a lifestyle brand so any

change in the lifestyle of customers directly affects the brand.

TASK ENVIRONMENT

I. Markets:

The major market segments are

 Alcoholics in bars

 Students in soft drinks hoses, restaurants, convenience stores.
 Families, which like to store pet bottles.

II.Customers:

Need of customers is to drive away thrust.

.III. Competitors:

The major competitor is Coca-Cola along with local/ unorganized sector.

Pepsi Co. Brads coca-cola bands

Pepsi Coke
7up Sprite

Mountain Dew Thums up

Mirinda lemon Limka

Mirinda orange Fanta

Slice Maaza
Distribution and Dealers:

The 3 main channels to reach the consumers are

Production unit

Distributor

Convenience Groceries

Restaurants

E.g. Pan shops - General stores - Bars

16

Bakeries -Coldrink

- Canteens

Theatres

Snooker bars

Consumers
V. Suppliers:

The suppliers are of bottles, caps, openers, posters, advertising boards, sugar,

flavors. Etc.,

VI. Facilitators and Marketing firms:

The transportation were housing is outsourced. Pepsi Co has excellent

advertising agency. Pepsi Co is rated as top 3rd brand in India after ITC.

VI. Publics:

Teenagers and Alcoholics form a major opportunities.

SITUATIONAL ANALYSIS

The major players in soft drink market in India are Coca-Cola and Pepsi Co; both

companies have strong brands, which compete against each other.

The current industry growth rate is 8%, which was 22% before the pesticide issue. The

pesticide issuer has affected both the company’s sales and market share very badly. The end

result was the consumer’s shifting to health drinks, which is an increasing trend and threat to

both the companies.

In order to increase their market share both the companies introduced 200 ml bottle,

which helped the total industry to grow by 10%.

 Currently there is a price war going between both the companies.

In Belgaum market the supply is not meeting the demand in some areas. The Pepsi Co.

can still do better if the supply and service is taken care of.

INDUSTRY PROFILE

The Indian Carbonated Beverage Industry is a very dynamic industry. The soft drinks

are the life style brads and are closely related with the consumers. The passion for cricket in

the country makes it a unique market.

The Indian Carbonated Beverage Industry is worth Rs.1000crore, which is equal to

270mm cases i.e., 6480mm bottled.

The main ingredients of a soft drinks are water, sugar, added flavors, and carbonated

gas. Though some channels like Bar and Restaurants run business throughout year, for other

channels the peak season is between February to June.

Manufacturing Process:

WATER AND WATER TREATMENT

Pure water is taste less, colours less and odor less. Water as it occurs in nature, whatever the

source, always contains impurities in solution or in suspension. The determination of these

impurities makes water analysis necessary and the control of these impurities makes water

conditioning essential.

The various sources of water can be classified as – Rainwater, surface water, ground

water. Irrespective of the source of water, the water has to be tested and treated before raking

into the production.

Testing and Treatment procedure adopted at M/s. Nectar Beverages Pvt.Ltd., Dharwad.

The source of water at Nectar Beverages Pvt.Ltd., is ground water. The water is tested or

various parameters like, hardness, alkalinity, suspended impurities, and for Microorganisms.

Treatment Procedure:

There are two types of water treatment adopted at Nectar Beverages Pvt.Ltd.,

1. Chemical Batch Treatment: This water is used for beverage purpose.

2. Ion Exchange: This water is used for Boiler Feed water, Cooling tower, D.G.Sets.,

Condenser, Heat Exchanger & Bottle washer.

1. Chemical Batch treatment process: Here, the raw water is collected in

storage tanks and dosages for chemical treatment are given according to

the characteristics of the raw water. The source of raw water is bore well.

At preset; we are holding three water treatment storage tanks, ou8t of which two

tanks are of 3, 00000 ltr. Capacity and one is 4, 00000 ltr capacity.

Raw water is collected from the bore wells in the storage treatment tanks and analyzed

the characteristics of raw water Viz- P- alkalinity, M- alkalininity, temporary hardness and

calcium hardness, afterwards chemical dosages are fixed. After addition of chemicals,
mechanical agitator stirs the water, and 3 hors contact period is given before taking the water

for production.

Treated water passed through sand filter to remove and flock carry over, then an

activated carbon filter, which removes chlorine, and off tasted/odor causing impurities. Finally

it goes through 5 Micron pore size polishing filters to remove and carbon that may have been

carried out over from the carbon purifier, and then through ultraviolet. Chlorine concentration

is maintained at 6 to 8 PPM level before carbon filter and 2 hours contact time prior to

dechlorination.

Details of Chemicals used:

1. Lime: Added to remove alkaline compounds from water to an acceptable level

and to reduce temporary hardness.

2. Bleaching powder: Added for chlorination to oxidize micro organism.

3. Ferrous sulphate: Added for coagulation and flocculation i.e., to remove the

suspended solids and also insoluble materials created by chlorination and alkalinity

reduction is removed.

The sludge is drained and the treatment tanks cleaned with water after every treatment and

then fresh raw water is taken for fresh treatment.

ION Exchange Method:

Source of water – Bore well

Liquid hypochlorite is injected into the on-line water flowing from Bore well to raw water

tanks. Once the raw water is chlorinated, after giving sufficient contact time, the water is passed

through sand filter, carbon filter and resin bed. Then the soft water is stared in soft water
storage tanks. Before the water goes into storage tanks, 2- PPM of chlorine is injected into the

on-line water flowing from softener to soft water storage tanks. Contact time in storage tank is

minimum 2 hours. Then the water from the tank are being pumped on it passed through 5

Micron pore size polishing filters to the bottle washer/boiler. The concentration of chlorine at

the final outlet will be around 2 PPM.

SWEETENING AGENT & SYRUP PREPARATION

Sweetening agents are those subsistence, which when blended with flavour, acid, etc.,

will provide satisfactory sweet taste in the finished beverage. They also furnish body, which

helps to carry or transits the flavour. They also give energy or food value to the beverage.

Sugar is the sweetening agent, which is used in our industry.

Sugar is colour less or white when pure and derived from sugar cane.

Syrup Preparation:

The preparation of the syrup is certainly one of the most important operations in the

beverage plant, both from the standpoint of sanitation and control of concentration. The object

in syrup making is to prepare satisfactorily bended and finished syrup from which uniforms

beverages of high quality can be produced.

Normally required quantity of sugar of high quality is added to treated water and heated to

85’ C, in a high grade stainless steel double jock vessel. Activated carbon is added to this to

21
remove impurities. Impurities along with activated carbon added to the sugar are separated

from the sugar solution by filtering the sugar syrup. Filter paper and Hyflo supercel are used

as filter aid. The temperature of the clear syrup thus obtained is brought down to 20’C and

stored is called “Simple” syrup.

When the syrup is completely prepared by the addition and blending of all flavoring

ingredients it is called as “Ready” / “Finished” / Flavored syrup. The syrup is ready for use in

production process.

CO2 & CARBONATION

The phenomenal of acceptance of carbonated beverage as a form of refreshment is done

in part to a unique taste, Zest, and sparkle imparted to the beverage by Carbon Di-Oxide. It

also adds to the life of the beverage.

The CO2 used for Beverage purpose are 99.9% pure, free from moisture, air, oil, grease and

other impurities.

The amount of CO2 dissolved in solution is called as volumes. The number of volumes

of gas in the finished beverages has a definite relationship to the taste of the beverage. Correct

carbonation means a sparkling, stimulating, thirst quenching beverage that completely

refreshes and satisfies the consumer. Since there is definite relationship between taste and

carbonation, it is extremely important to determine and maintain the carbonation, which has

proved most acceptable through experience in consumer section.

The technique adopted at M/s. N.B.P.L. For carbonating the beverage is as under:

The ready syrup, which is prepared and stored in ready syrup tanks, is taken to the bottling

line. It is passed through a machine called ‘Premix’ where the syrup is automatically diluted
with treated water to the required level. Once it is diluted it is sent to the carbonator for

carbonation.

For carbonating the beverage a mechanical device known as “CARBONATOR” is

used. Co2 gas enters the carbonator through a valve at the top of the body of the carbonator.

The dome as well as the body of the carbonator is filled with gas. Syrup is sprayed into the

carbonators from the top, which flows down through the baffle plates provided inside the

carbonator. As the water flows down it gets mixed with the Co2 gas present inside the

carbonator.

Carbonation can best be obtained by increasing the pressure inside the carbonator

vessel and by pre-cooling the syrup before it is pumped to the carbonator. Low gas volume

product need not be pre chilled

Concentrates

Flavoring Materials used in making carbonated beverages are primarily are alcoholic

extracts, emulsions, alcoholic solutions or fruit juices.

Concentrates or non-alcoholic beverage bases are supplied by our principal company

from Channo (Punjab) having international standards. On addition of

concentrate to the simple syrup we get respective finished syrup ready for further process to

bottle beverages.

Bottle washing and bottle inspection

 ONE of the most important aspects of the bottling operation is the cleaning of the reusable

bottle when it returns to the bottling plant. In order to be reused the bottle must be 23

sterile, of acceptable appearance, rinsed free of any detergent or sterilizing agent, and of good

mechanical strength.

The object of bottle washing is to product both a clean bottle and sterile one. The fact

that the bottle looks clean does not indicate it is sterile, and on the other hand, a dirty looking

bottle may be a sterile one.

The present day bottle washer is designed to both clean and sterilize bottle before

sending them to the filling line.

Bottle Washing Compounds:

Members of the alkali family of chemicals make up the basis of most bottle washing

compounds. Caustic soda is the principle ingredient because it has by far the best germicidal

properties.

We also add certain chemicals to caustic solution to improve the detergent action of the

solution. Three factors are crucial in the germicidal efficiency of the washer. These are: contact

time, caustic strength and temperature.

Operations of the Bottle Washer:

1. The first step in the operation precedes the washer. When the cases of empties return

to the bottling plant, they must be sorted and culled to remove especially dirty bottles,

or ones contaminated with paint, tar, etc., or chipped or broken bottles. This operation

is often done by hand.

2. The inspected bottles are feed into the bottle washing machine, automatically. The

bottles are turned up side down to drain any contents and given a pre rinse spray wash

both internally and externally with plain water with certain pressure. This operation is

called pre rinse operation. Then the bottles are moved to pre wash compartment, where

the bottles are spray washed both internally and externally with 1 to 1.5% caustic

solution

@ 45’C to 55’C temperature.

3. Bottles are then, moved into a tank in the bottle washing machine, where the bottles

are soaked with caustic solution of 3 to 3.5% @ 75’C temperature. To get

this best results that bottles are to be soaked in this compartment for a minimum of 7

minutes at the caustic strength & temperature given as above. This operation cleans

and sterilizes the bottle.

4. Then the soaked bottles are moved to a compartment called “Hydro”, where again the

bottles are given spray wash both internally and externally with 1 to 1,5% caustic wash

@ 50 to 55’C.
 5. Bottles are moved to a compartment called pre-final compartment where again the

bottles are given spray wash with soft water to remove the caustic traces. Here the

temperature is maintained around 40 to 45’C.

Finally bottles free from caustic moved to a compartment called final rinse compartment where

the bottles are again, wanted sprayed both inside and outside with soft water to deliver clean

and sanitary bottles to the conveyor enroute to filler at ambient temperature

Before the bottles moved through the conveyor, the bottles are subjected to methylene blue test

to ensure the bottles are free from mold and as also tests are carried our to determine whether

the bottles are free from caustic traces. These tests are done at random.

Then the washed bottles are moved through conveyor to filler for filling operation.

Before the bottles are moved to filler the bottles are subjected to visual inspection, which is

called bottle inspection.

Bottle Inspection:

The clean bottles undergo inspection after they leave the washer and before they arrive at the

filler. Inspection can be done visually by an individual. It is a job requiring a great deal of

concentration and no individual can be efficient for long stretches at time. Provision should be

made for changing inspectors frequently, and adequate bring diffused light should be provided

which illuminates all parts of the bottle effectively, but does hot glare in the operators eyes.
A receptacle should be provided, convenient to the inspector for non-usable bottles, and cases

should be handy to accumulate unclean bottlers for rewashing. Those bottles found acceptable

to the empty bottle inspector are sent for filling and crowning.

Filling and the bottling line

The bottles, on a suitable conveyor line arrive at the rotary filler, which is equipped

with filing heads. The beverages filling unit includes a filling tank, which receives beverage

from the carbonator.

The tank is also connected to the gas chamber of the carbonator. This connection insures

balanced pressure and a proper beverage level in the tank.

On entering the head, the bottle is sealed to the filling valve and a counter pressure is

established in the bottle. At this point, the pressure inside the bottle is equal to and derived

from the filling tank.

Once the bottle is properly pressurized, carbonated water flows in displacing air and

Co2 in the bottle. The displaced gas passes through the counter pressure lines back to the top

of the filler tank.

When the proper level of beverage in the bottle is reached, the supply is cut off and the

top gas pressure in the bottle is sifted to the atmosphere.

Once the top pressure has been released, the bottle is removed from the valve and passes

to the crowner.
 The crowning unit consists of the hopper for holding the crown supply, a crown chute

and the crowning mechanism. The crowned bottle then moves from the crowner on to the out

feed conveyor.

Final Inspection Point:

Then the sealed bottles are moved on a conveyor line and it is subjected to a final

inspection. Where the inspector checks for un crowned bottles, over/under filled bottles,

foreign matter (if any), and for any other visual defects.

Once the inspector satisfies with the quality of product and package, he allows moving

the bottles, further to the collecting table, where the bottles are manually collected and put in

the crates of 24 bottles and moved further for warehousing, and awaiting shipment.

Plant Sanitation

The most scrupulous sanitation practices are essential in soft drink plant. The highest

standard of cleanliness for premises, personnel and equipment is obviously necessary due to

the type of operation involved that of manufacturing a food product.

Sanitation is necessary to insure the keeping qualities, proper appearance and full

flavour of any soft drink. When the equipment becomes contaminated, yeast, bacteria or mold

microorganisms begin to appear in the finished beverage. Increased number of these

microorganisms will cause the development of undesirable tastes and odors and ultimate

spoilage of the product. Nothing will kill the demand for a beverage any quicker than off-tastes

and odors or product spoilage.

 Hence sanitation, good plant house keeping and good manufacturing practice are

strictly implemented at N.B.P.L.

Quality Assurance
Perhaps the most important activities in a bottling plant are those concerned with the

maintenance of the standards of purity and uniformity set for the beverages produced. These

activities can be grouped together under the heading of Quality Assurance.

To get the top most quality of finished product, all the ingredients such as water, sugar,

Co2, concentrate are strictly inspected and analyzed by our Quality Assurance Department.

Apart from raw materials, on line sampling, finished products are also tested.

Samples of beverages produced are picked up from the market for testing by

independent laboratories of international repute.

History of organization

The manufacturing of soft drinks began in the 1830's. However, the evolution of

soft drinks took place over a much longer time period. The forerunners of soft drinks began

more than 2,000 years ago when Hippocrates, the "Father of Medicine," first suspected that

mineral waters could be beneficial to our well-being. But Hippocrates did not envision drinking

the effervescent mineral waters bubbling from the earth's crust. Instead, the Greeks and

Romans used them for bathing and relaxation. More than a thousand years passed before

mineral waters made the transition from therapeutic bath to refreshing beverage.
 The soft drink industry was a seasonal business in the early days, operating

primarily during the summer months. Sales were limited by few outlets for the new carbonated

beverages, and by the consumer's restricted mobility.

How Soft Drinks Are Made:

Soft drinks are mostly water. So the quality of the water going into soft drink is

very important. A series of filtration systems produces the super-purified water that is fresh,

clean and clear.

The Flavor Secret

Here’s where the magic happens. From secret recipes, flavorings are added to give

each soft drink its unique taste. By combining sweeteners, herbs, berries, and many other

wholesome ingredients, a syrup base is created which is added to the pure water

Adding Bubbles Is A Gas:

After the flavors are added brands like Pepsi and Coke is enhanced in India the local brands

are being stabilized by advertisements, good quality and low cost.

The soft drinks market till early 1990s was in hands of domestic players like Campa,

Thumps up, Limca etc but with opening up of economy and coming of MNC players Pepsi and

Coca-Cola the market has come totally under their control.

 Non-alcoholic soft drink beverage market can be divided into fruit drinks and soft

drinks. Soft drinks can be further divided into carbonated and non-carbonated drinks. Cola,

lemon and oranges are carbonated drinks while mango drinks come under non-carbonated 30

category. The market can also be segmented on the basis of types of products into cola products

and non-cola products. Cola products account for nearly 63-64% of the total soft drinks market.

The brands that fall in this category are Pepsi, Coca- Cola, Thumps Up, and Diet coke, Diet

Pepsi etc. Non-cola segment, which constitutes 36-37%, can be divided into 4 categories based

on the types of flavors available, namely: Orange, Cloudy Lime, Clear Lime and Mango.

Soft drink production area:

The market preference is highly regional based. While cola drinks have main

markets in metro cities and northern states of UP, Punjab, Haryana etc. Orange flavored drinks

are popular in southern states. Sodas too are sold largely in southern states besides sale through

bars. Western markets have preference towards mango-flavored drinks.

PepsiCo is a world leader in convenient foods and beverages, with revenues of

about $29 billion and over 153,000 employees. The company consists of the snack business of

Frito-Lay North America and the beverage and food businesses of PepsiCo Beverages and

Foods, which includes PepsiCo Beverages North America (Pepsi-Cola North America and

Gatorade/Tropicana North America) and Quaker Foods North

America. PepsiCo International includes the snack businesses of Frito-Lay International and

beverage businesses of PepsiCo Beverages International. PepsiCo brands are available in

nearly 200 countries and territories.

 In May 1886, Doctor John Pemberton a pharmacist from Atlanta,

Georgia invented Coca Cola. John Pemberton concocted the Coca Cola formula in a three

legged brass kettle in his backyard. The name was a suggestion given by John Pemberton's

bookkeeper Frank Robinson.

The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy

in Atlanta on May 8, 1886.

Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well

as the caffeine-rich kola nut. By the late 1890s, Coca-Cola was one of America's most popular

fountain drinks. With another Atlanta pharmacist, Asa Griggs Candler, at the helm, the Coca-

Cola Company increased syrup sales by over 4000% between 1890 and 1900. Advertising, was

an important factor in Pemberton and Candler's success and by the turn of the century, the

drink was sold across the United States and Canada. Around the same time, the company began

selling syrup to independent bottling companies licensed to sell the drink. Even today, the US

soft drink industry is organized on this principle

The competition:

In 1931, when Coca-Cola was the envy of the world of soft drinks and one of

the most worry-free profit machines in the history of business in the United States, Pepsi-Cola

was declared bankrupt for the second time in its history. In 1987, PepsiCo, Inc., with sales of

over $11 billion, ranked 29 in Fortune's list of the nation's 500 largest corporations. One

analyst asserted in 1986 that PepsiCo "has emerged as perhaps the single best consumer

products company that exists today." Coca-Cola's sales in 1987 were $7.7 billion, which

placed it 54 in Fortune
 Both companies were diversified by the mid-1980s. About 70 percent of Coca-

Cola's sales and almost 85 percent of its profits, however, were still derived from soft drinks,

with the remainder coming from the food and entertainment divisions.

No single foreign investment has been the center of much attention and controversy

in the late 1980 and 1990s as the PepsiCo project in India. The project, Pepsi

Foods Limited, was cleared by the Indian government in September1988 as a joint venture of

PepsiCo, Punjab government-owned Agro Industrial corporation (PAIC) and Voltas India

limited. Before this project was cleared, PepsiCo made an attempt to enter into India as early

as in May1985, when it teamed up with Agro Product export Ltd.

A company owned by R. P. Goenka group, and sought permission from the central

government to import cola concentrate and sell a PepsiCo brand soft drink in the Indian market,

in return for export of juice concentrate from Punjab. Under this proposal, the main objectives

put forward by PepsiCo were ‘to promote the development and export of Indian made and

Agro –based products and to foster the introduction and development of PepsiCo products in

India’. This proposal which was submitted to the secretary at Ministry of Industrial

development received rejections on the grounds that the import of concentrate could not be

agreed to and the use of foreign brand names as Domestic Tariff Area (DTA) was not allowed.

PepsiCo successfully played the ‘Punjab card’ and again put forward a proposal in

1986 with stress more on diversification of Punjab agriculture and employment generation

rather on soft drinks. The proponents of project called it as a second “Green Revolution” in

Punjab and projected it as harbinger of a horticulture revolution that would end stagnation in

Punjab’s rural sector and would help in promoting small and middle farmers. A strong

argument was put

forward that this project will create ample of employment opportunities for the 33
Youth who has taken the path of terrorism and there by help in restoration of peace in Punjab.

This argument was well received in the political circles in Delhi and Punjab, which finally led

to PepsiCo’s entry into India in the form of joint venture with PAIC and Voltas as its partners.

The equity of Pepsi Foods Limited was divided among the partners with PAIC holding 36.11

%, Voltas 24% and PepsiCo 36.89% coupled with the‘PunjabCard’. PepsiCo also made certain

commitments with Indian government that also formed the basis of its entry, such as

The project will create employment for 50000 people nationally, including 25000

jobs in Punjab alone;

74 percent of the total investment will be in food and agro-processing. Manufacturing

of soft drinks will be limited to only 25 percent.

PepsiCo will bring advanced technology in food processing and provide thrust by

marketing Indian products abroad.

State of the art technology in food processing and provide in the field of soft drink

manufacturing and soft drink manufacturing at no foreign outflow;

50% of the total value of production will be exported:

An Agro –research center will be established by Pepsi Co in consultation with ICAR

and Punjab Agricultural University.

No foreign brand name will be used for domestic sales;

 The export –import ratio will be 5:1 over 10 years, which means that for every dollar

spent in foreign exchange on this project, the company will ensure an export earning

of 5 dollars for 10 years.

25% of the total fruits and vegetable crops in Punjab will be processed in the project

A substantial increase in government revenue due to consumer market expansion and tax

collection.

The proposal concluded by stating how well the project fitted with broad objectives

of the economy and how it ‘specifically supported national priorities in area such as Exports,

Agriculture, Employment and Technology’.

Many of PepsiCo's brand names are over 100-years-old, but the corporation is

relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-

Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company,

including Gatorade, in 2001.

Employees, business partners and the communities in which company operates and

in everything company does, company strives for honesty, fairness and integrity.

ORGANIZATION CHART

HINDUSTAN BEVERAGES Pvt. Ltd

 Sales & Marketing Head

Territory Development Sales manager Marketing Manager

Prod.n Finance
Manager Manager
Area sales Manger 1 Area sales Manager 2

CE1 CE2 CE3 CE4 CE1 CE2

Distributor1 Dist.2 Dist.3 Dist.4

Route1 Route2 Route3

 SAMPLING

All the potential retaailers in a particular selected area were considered is the sample.

The sample will be divided in 3 categories. 1. Convenience, 2. Grocery,

3. Restaurant. The Convenience like pan shops, bakeries, theatres etc., Groceries like general

stores and Restaurant like bars, cold drink houses & canteens etc.

The sample sizes will 50 retailers and 100 customers

RESEARCH DESIGN AND METHODOLOGY

 Selection of Data collection Method:

Primary data: Tabular format filling

In-depth Interview

Interaction.

Secondary data: Internet

 Selection of Measurement Technique:

Quantitative analysis, bar & pie charts.

 Primary considerations in Sampling


 - Population: Retailer and consumers of Belgaum

- Sample Frame: selected areas in Belgaum

- Sample Size: 50 retailers and 100 customers

- Sample Plan: visit to pepsi company retailers by vehicle & by walk.

 Method of Analysis:

 Quantitative

Competition Between PepsiCo and Coca Cola brands

 Ethical aspects:

I have made an effort to make this research work free from personal

Opinions and likings.

 Time and Financial Cost: Total survey took 12 to 15 days and Cost incurred was Rs

2000/-

 Limitations of study:


1) The study was confined to Belgaum city

2) The study was limited to only 50 retailers and 100 consumers

CHAPTER 3
COMPANY PROFILE