Sunday, October 18

The soda that beat out Coca Cola

They call it Incan gold--the yellow soda sold in every pincanteria and quiosco in Peru.  Coca Cola's former CEO said it "looks like pee" and "tastes like bubble gum."

Having tried it, I'd say that description is close to accurate. Inca Kola! It sure is satisfying, especially after a salty plate of chicharrones.

But the story of Inca Kola, and how it came to dominate the Peruvian soda market, is even more satisfying if you're the type who likes to "stick to the man." 

In 1935, a beverage maker in Lima brewed up a new concoction to commemorate 400 years since the city's founding. Using the herb "lemon verbena," they created a soft drink that appealed to Peruvian pride in it's heritage.

Within a few years, Inca Kola was the most popular in Peru. But Coca Cola and Pepsi, then competing to dominate the world soda markets, wanted to change that. 

JournalPeru, an online magazine on Peru, explains well what happened:

For years, Coca-Cola and its arch-rival Pepsi tried to dominate the Peruvian market, but despite their vast resources, they were never able to overtake Inca Kola as the preferred soft drink of the Peruvian public.

Inca Kola cleverly marketed itself as the nationalistic soft drink option, and Peruvians drank it by the gallons. Knowing the Peruvian market, Inca Kola targeted small mom-and-pop shops and restaurants, offering incentives and marketing assistence. Partly due to national pride, partly due to its sweet flavor, and partly due to its cost (less than its rivals) Inca Kola became the leader of the Peruvian soft drink industry. One of its key marketing strategies was to convince Peruvians that Inca Kola was a much better complement to Peruvian food than either Coke or Pepsi.

And their strategies worked! Coca Cola and Pepsi stopped fighting Inca Kola's popularity. Instead, the soda giant Coca Cola resigned to buying 50% of the company's stock. Thanks to the strategic business partnership between the two beverage companies, Inca Kola has expanded its distribution even into the United States and Europe. 

As for the future of the company, it's won my heart and my taste buds. I'm going to be looking for Incan gold in my Colorado supermarket when I return.

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