Diet Coke shortage gives zero-sugar D2C beverages a summer opportunity

Subscribe to enjoy similar stories.A nationwide shortage of Diet Coke is creating an opportunity for India’s direct-to-consumer zero-sugar beverage brands to win new customers as supply disruptions leave multinational soda makers short on shelves this summer.With demand for low-calorie drinks rising during the peak summer months of April and May, newer beverage companies are using the disruption to attract consumers who may not find their usual diet cola, betting that temporary shortages could translate into repeat purchases, industry executives told Mint.For many of these startups, including Paper Boat Zero, Chinni Kum, Zyro, and Jimmy's, the disruption has been less severe because a large part of their portfolio is sold in PET bottles rather than aluminium cans.Ankur Bhatia, founder of Jimmy’s, said the company’s bottle-based packaging has given it a ‘tactical edge’ because shortages in aluminium cans have worsened as beer and soft drink makers compete for the same production capacity. “The can-making lines are the same.

PET bottles like ours can move fast,” he said. The nationwide shortage has affected both tier 1 and tier 2 cities.However, the window for these D2C brands may be narrowing.

Despite the current retail vacuum, smaller players face a steep 40% goods and services tax (GST) and a 25% rise in raw material costs for those relying on cans. Whether these short-term gains can survive the return of global supply chains only time will tell.Bhatia said Jimmy’s zero-sugar range has become its largest-volume category within a year of its launch and now contributes about 25% of revenue.

“The challenge right now is how fast one can supply. Consumers are not looking for offers.