The year 2004 saw the rise of a new kind of beverage in the consumer market. Produced by Universal. Robina Corporation (URC), C2 Green Tea drink was a product that was unlike anything that the Philippine market, which was weaned on cola drinks and fruit juice beverages, had seen until then.
URC had wanted to penetrate the country’s huge cola drink market. However, it quickly realized that there was no way they would be able to compete with mighty Coca-Cola or Coke, which was the dominant consumer beVerage of the time. After all, so many others have tried to challenge the market supremacy of Coke and nobody has ever come close to even threatening their huge market share.
The insight that the company came up with: instead of trying to compete head-on versus Coke, why not build up a different beverage category altogether? Essentially, they would compete with Coke by not competing directly with it. They quickly spotted an opportunity in the• form of bottled tea drinks, which were gaining popularity in China at the time. While there were already ready-to-drink tea products in the Philippine market, these were either in the form of powdered beverages or expensive bottled teas.
URC positioned C2 to be a healthy alternative to cola drinks. This was a timely message as consumers were becoming more health-conscious, particularly with what they eat and drink. C2 was brewed from natural green tea leaves that the company says contain antioxidants—micronutrient aids for better health. The beverage came in 355ml, 500ml, and 1-liter plastic bottles. But what was very important, C2 was initially priced lower than Coca-Cola’s beverages.
In its first month, URC quickly sold a hundred thousand bottles of C2. It rapidly built up a loyal following, especially among a surprisingly large market segment: people who have stopped drinking cola beverages for health reasons. What is more, cola drinkers who discovered the health premise of C2 became eager to let go of their cola habits, especially upon realizing that C2 also happened to be cheaper as well.
C2 rapidly became a success, often being sold out in stores and much of this success could be attributed to its key strategy points which could be summarized as follows:
- deciding not to compete directly with Coke and instead make competition irrelevant by producing a totally different beverage concept;
- targeting a market that was already weary of cola beverages, a market that turned out to be huge;
- building the product’s position around the message of better health; and
- offering a product that happened to be cheaper than cola drinks, without necessarily communicating that it was “cheap”.
C2’s success was eventually responsible for giving Coke its first real challenge in the country for years. In fact, the impact of C2 on cola sales was so significant that it led Coca-Cola to aggressively push a new product into the market, Coke. Zero which was positioned to be a health-oriented beverage. By then, however, C2 had already built up the new product category of ready-to-drink green tea beverages and dominated it with a 75 percent market share.