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Pepsi-Cola War Disrupts Market



  • Pepsi-Cola War Disrupts Market

The Sallah break was the period used by a lot of Nigerians to beat a fast retreat from the drudgery of their everyday jobs to various holiday spots preferably outside their towns and cities of residence.

The Lagos-Abeokuta Expressway witnessed its own share of the commuters departing Lagos, with the hawkers capitalising on the dense flow of vehicular movement to sell off their wares. It was observed that majority of the drink-hawkers displayed PepsiCo’s products. The Cola war is real.

The year started with all the cola brands increasing their prices in response to inflation and foreign exchange (forex) pressure. BIG Cola, a relatively new entrant manufactured by AJE Group, started selling 65cl PET at the rate of N100 per unit and later the price increased to N130. Coca-cola increased the volume of the PET from 50cl to 60cl and it sells for N150. Pepsi’s 50cl PET was selling for N120 until July 25, 2017 when the price crashed to N100. Coca-cola’s competitive response was the re-introduction of Solo Coke, a 35cl PET, which sells for N100.

Market survey

In Ikorodu, the fastest growing suburb of Lagos metropolis, Pepsi is selling more than the other brands. Mummy Basit Store at TOS Benson Road, sells soft drinks in both wholesale and retail options. The owner of the store said Pepsi has been selling more relative to other brands. According to the workers at Alubarika Food Canteen, Ayanbure Road, customers demanded for Pepsi only. However, at Shehuma Bar, Coke’s 60cl bottle was hotcake, as customers needed it to mix alcoholic drinks. Fatmot Restaurant at Ayangbure Road sells more of Pepsi; the owner said her customers rarely ask for Coke and Big Cola.

The story is a little bit different in Ibadan, Oyo State capital. The popular Sky Amala Restaurant at Bodija sells only Coca-cola products and their customers have never complained about the price of Coke.

This is the same with Ola Mummy Canteen at Bodija Ojurin; and Ultima Executive Restaurant at Bodija-Secretariat. Mummy Helen Canteen at J Allen, Dugbe, also sells only Coca-Cola products but recorded dip in sales on the 60cl PET. For this same reason, Iya Azi Canteen at Mokola Roundabout said she has stopped stocking the 60cl PET Coke.

Price strategy

In a country where most people live below a dollar per day, price crash would matter a lot. Most cola drink-lovers do not know the difference in cl; many do not even understand the meaning of cl. “Coke’s big bottle is N150, while same bottle for Pepsi is N100”, said Funke, one of the passengers in transit on Lagos-Abeokuta expressway last Friday. The 10cl difference is not obvious to consumers; rather the 15cl difference between Pepsi’s 50cl and Solo Coke is very visible to their eyes.

A consumer asked: “Pepsi is big, while Coke Solo is small, so why should I buy the small one for N100?”

However, Sanni, a student and customer of Libra Kitchen, University of Ibadan also said he took the 60cl Coke. Charles, a customer of Honey Food Canteen, Bodija Market in Ibadan, said he takes Big Cola irrespective of the price. He would prefer 60cl PET Coke over the Solo Coke. Some do not see value in a smaller pack which goes for a lower price. While Solo Coke is a good retaliatory strategy, many say the volume of 35cl does not satisfy them.

Promotion, brand

Pepsi Cola is using every medium available to push the #NoShakingCarryGo campaign to reinforce its low-price appeal. #NoSha-kingCarryGo Bus Rides have been going from one location to the other within Lagos, giving free BRT tickets and free Pepsi to commuters. This marketing rave has been taken to Lekki Toll Gate and BRT terminals at Berger, Obalende, Mile 12, TBS and Ikorodu. A customer, commenting on the campaign, said consumers are now becoming aware of Pepsi’s great taste.

Pepsi’s #NoShaking-CarryGo’s advert says nothing about the uniqueness of Pepsi’s brand – all it says is “Pepsi is now N100”. This is the right time for a competitor to rather reinforce its’ own brand. Coke’s proposition is a bottled Happiness, and Coca-cola Nigeria is rather focused on promoting the global “Share a Coke” campaign. Cocacola has taken “Share a Coke” beyond replacing the brand icon with Nigerian names; the company has produced over 1, 000 songs using common names of Nigerians. The brand seems not to lose focus of the global strategy of “One Brand” despite the Cola War in Nigeria.


The Chief Executive Officer, Contagious 128 Media, a digital marketing agency based in Lagos, Sola Adewumi, said: “When you have the equity, then you can play with pricing.”

Sola, who has worked on many multinational brands, said PepsiCo and Coca-cola have the capacity to cut prices without having far-reaching effect on their brands in the long run because they are not at the brand-building stage. “Pepsi and Coke are both at the stage of taking their consumers from loyalty to addiction; only the new entrants would suffer in this price war,” he added.

The founder of Disrupt Digital, David Idagu Goldfinger, agrees no less with Sola. He added that the consumers’ loyalty “will lie with any of the brands that offer them a good deal as their target audience (class C & D) is more sensitive to price than branding.”

Goldfinger, a PR consultant, believes the consumers will be on the winning side eventually. Sola expects Pepsi’s contenders to also bring down their prices. “The consumers will be surprised to discover that the other brands also have the capacity to bring down their prices,” he said.

“As we remember Glo Mobile for the per-second billing introduced in the telecom industry, we will remember Pepsi for disrupting this market to favour consumers,” an analyst said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend




Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.


  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return



Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather




Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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