Hit or miss: Can Cipla’s ORS stir up the $14.9bn beverage market?

Since the pandemic, there has been a notable shift towards healthier beverage choices as consumers increasingly prioritise health and wellness. Consumers' concerns over sugar substitutes, packaging, and sourcing have been widespread in the beverage industry, which has increased demand for functional drinks—particularly electrolyte-infused and tender coconut waters.

Cipla Health, the consumer healthcare subsidiary of pharmaceutical major Cipla, is capitalising on this trend by positioning its Prolyte ORS (Oral Rehydration Solution) not merely as a fluid to combat dehydration, but as a healthier alternative to sugary drinks.

Shivam Puri, CEO, Cipla Health Limited, says, "There is an increasing demand for low-calorie, high-electrolyte options. Our Cipla Prolyte ORS addresses this need, providing an optimal solution with just 9 to 11 calories, in accordance with WHO guidelines."

A report by PharmaTrac, an online database from AIOCD Ltd and AIOCD Pharmasofttech AWACS, indicates that the moving annual turnover (MAT) of ORS has more than doubled over the past four years. The MAT for May 2020 was Rs 334 crore, which increased to Rs 716 crore in May 2024, more than doubling in size. In May of last year, MAT was recorded at Rs 583 crore.

MAT is a rolling calculation that shows the total value of a variable over the previous 12 months.

The brand does not consider Cipla Prolyte ORS a solution for dehydration, but rather a healthier option compared to any sugary drink. “Our role as marketers is to make these products acceptable and help consumers make healthier choices,” says Puri.

To guarantee broad acceptance of the product, the company is introducing a proposition of 'Accha Thanda' in its latest marketing campaign.

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“With the new proposition, the total addressable market (TAM) we see is the entire beverage industry,” notes Puri. 

According to a TechSci Research industry report, the non-alcoholic beverage market in India is projected to reach USD 15 billion in 2024, equivalent to around Rs 1300 crore, with a growth rate of 7.3% CAGR, and is expected to reach approximately USD 23 billion by 2030.

In the ORS market, however, Cipla’s Prolyte faces stiff competition from prominent brands such as Electral by FDC Limited, which commands more than 50% of the market share, along with Enerzal and Walyte. Prolyte ORS can be found on both traditional and modern retail channels, as well as quick commerce platforms such as Swiggy, Blinkit, and Zepto.

The product enjoys notable popularity within the tetra pack segment, as indicated by the PharmaTrac report. It is available for Rs 31.5 for a 200 ml quantity on Zepto.

Cipla Health commenced the marketing of Prolyte in 2019, offering three ready-to-drink flavours (Apple, Orange, and Lemon) along with one powdered flavour. The primary focus of its promotion has been on gut health, relief from diarrhoea, and combating dehydration.

The brand currently provides 10 ready-to-drink flavours and three powder flavours. According to Puri, the brand has undertaken a category development effort with this product.

The brand is strategically investing in a combination of mass media and digital channels, complemented by comprehensive sampling efforts. “We’re also presenting products to healthcare experts and practitioners,” emphasises Puri.

The company holds the view that celebrity endorsements are not essential for its ORS range. Citing Omnigel, a pain recovery gel from Cipla Health Limited, Puri says it is an example of choosing a non-celebrity strategy, in contrast to competitors who relied on celebrity endorsements. The brand thinks that presenting authentic scenarios connects more powerfully with consumers.

However, the effectiveness of the brand's strategy remains to be seen, as many established brands in India are adapting to meet the rising demand for healthier beverage options, particularly within the carbonated drinks category. For example, Coca-Cola has introduced its Zero Sugar drinks, PepsiCo offers Pepsi Zero Sugar, and Sprite has launched Sprite Zero, among other similar products. 

How Cipla Health achieved the Rs 1,000-crore revenue milestone?

Cipla Health, active in 16 categories including pain care, smoking cessation, and cough and cold, has surpassed the Rs 1,000 crore revenue mark last year, achieving a tenfold growth over the past seven years with a compound annual growth rate (CAGR) of 30%. 

It has more than 20 brands including Nicotex, Cofsils, Omnigel, Maxirich, Endura Mass, and several others.

The consumer healthcare subsidiary of Cipla is now set to expand into various segments, including sexual wellness, while also broadening the range of products within its current categories. Its most recent acquisition includes Ivia Beaute, along with its brands Astaberry, Ikin, and Bhimsaini, for a total of Rs 130 crore.

The company, rooted in a robust pharma heritage, focusses on wellness and exclusively selects brands that fall within this category.

“We prioritise deep consumer insights, developing products that make a real difference, which aligns us as both a wellness and healthcare company," says Puri, who has spent 12 years of his career at Hindustan Unilever Limited (HUL).

"The categories in which we operate are currently in the initial phases of market penetration. Although we have established leadership in several of these segments, the overall category penetration is still low, indicating a significant growth opportunity," he explains.

He cites the example of Cipla's MamaXpert range of products. "We’re dedicated to sustainable, profitable growth instead of depleting resources. While other D2C brands might strive for 200% growth, we are satisfied with a consistent 25-30%, ensuring our business stays profitable. We are broadening our D2C portfolio to include additional brands, such as Reveal Derma Science for skincare and Gain Essentials for hair care.

The company's team, with experience in FMCG sector, gathers customer insights from various sources. Puri explains that with MamaXpert, it identified a gap: while most brands focus on the child when a woman becomes pregnant, few address the needs of the mother herself.

MamaXpert was created to fulfill the unique needs of expectant mothers. Following a positive response to their initial products, the brand expanded into baby care, offering solutions for both mother and child.

Nicotex on quick commerce

Puri shares another observation regarding quick commerce: numerous smokers during the pandemic, while at home with their families, desired to quit but found it difficult to access smoking cessation products.

This insight led the company to offer Nicotex on quick commerce platforms. For Nicotex, the approach is to encourage smokers to quit by reassuring them that they are supported throughout their journey. The ultimate vision of the brand is to make Nicotex unnecessary by helping everyone successfully quit smoking.

Beauty and skincare market

Puri highlights the company's robust position in the D2C landscape, featuring brands such as Rivela and Tugain, while also maintaining a strong offline presence with Astaberry.  

He notes, "Expanding a D2C-only brand offline can be challenging, as it requires substantial investment. However, we are fortunate to have an integrated system in place, which provides a solid foundation for scaling in both channels and effectively communicating with consumers."

Marketing mix

The brand employs a 60:40 marketing budget split, with 60% allocated to television and 40% to digital. However, each product within the brand’s portfolio is supported by a tailored strategy based on the consumer’s preferred channel.

For Nicotex, the most cost-effective approach combines television and digital. In contrast, products like Nicotine lozenges or patches rely more heavily on digital-only campaigns, complemented by consumer education at the chemist level.

“The strategy varies depending on the objective of each product, ensuring we communicate the message in the most effective way for each case,” says Puri.