Music is aiding Coke in its fight against Pepsi in the cola wars in Pakistan. By sponsoring "Coke Studio," a local version of "MTV Unplugged", Coke has gained significant market share at Pepsi's expense, according to a report in the Wall Street Journal. While Coke now claims 35% of all cola sales in Pakistan, Pepsi's market share is now down to 65% from a high of 80% in 1990s which was achieved mainly through sponsorship of cricket in Pakistan. 
Coke Studio, sponsored by Coca Cola Pakistan, is a one-hour show that features musicians playing a distinct blend of fusion music that mixes traditional and modern styles. Helped by the media boom in Pakistan, the show has had dramatic success since it was launched three years ago.
A Wall Street Journal story says that Coke Studio is now carried by 27 channels, including regional Sindhi- and Pushto-language channels, where entertainment tends to be more orthodox. The show’s Facebook page has about 200,000 fans and is adding about 10,000 a week. The song “Alif Allah Chambey Di Booty” by Arif Lohar and Meesha Shafi that featured on Coke Studio in June has recorded 531,537 views in just over a month on YouTube. It is popular in both India and Pakistan where the netizens can’t seem to get enough of it.
Here is an except from the Wall Street Journal story on Coke Studio in Pakistan:
Coke and Pepsi's battle in Pakistan shows how some foreign companies remain committed and are expanding here even as others head for the exits because of concerns over terrorism and the country's struggling fiscal position.
Tetra Pak International SA, the Switzerland-based packaging company, is about to complete a €90 million ($116.5 million) factory in Lahore. Metro AG, the German retailer, has invested $175 million to open a string of outlets in the past two years. Adidas AG of Germany has recently ramped up orders of soccer balls from Pakistan, one of the world's largest suppliers.
Others, like U.S.-based Procter & Gamble Co. and Nestlé SA of Switzerland, continue to make healthy profits here. Nestlé, for instance, operates Asia's largest dairy-processing factory in Punjab, Pakistan's largest province.
An upsurge in terrorist suicide attacks and a balance of payments crisis, which led to an $11 billion International Monetary Fund bailout program in 2008, have scared off other businesses. Foreign direct investment in Pakistan fell 39% to $12 billion in the year to July, according to central bank figures. Still, countries like Pakistan continue to matter for consumer-goods companies because they have young populations and growing economies. The economy is set to grow over 4% this year and Pakistan regularly beats out nations in the region, including India, in the World Bank's study on ease of doing business.
Coke said sales volumes fell 2% in North America in the first quarter of 2010 but rose 11% in its Eurasia and Africa division, which includes Pakistan.
Pepsi remains bigger in some Middle East nations, where an Arab League boycott of Coke in the 1970s and 1980s—stemming from its investments in Israel—left the playing field open.
In other emerging markets like China, India and Russia, the two rivals are locked in a close race.
Nestle and Unilever, two of the leading food and drink companies in Pakistan have been reporting strong growth in headline sales, according to BMI. Both companies grew their topline sales revenue by more than 20% year-on-year in the year to December 31 2009. Their annual sales are now approaching US$500m.
Against the odds, demand for beer is strengthening off the back of strong growth posted by Murree Brewery. Despite Muslim's accounting for 97% of Pakistan population and extensive bans on the consumption of alcohol in place, Murree has been reporting strong financials. Q1 (three months to September 2009) after duty and tax sales climb by 16% to PKR539.4mn (US$6.5mn), while net profit after tax increased by 26% to PKR63.9mn (US$0.76mn).
As the sales of cola drinks and tobacco products decline in the West, US companies are targeting developing nations with heavy advertising to increase sales.
Bunge, the third biggest US agribusiness company after Archer-Daniel-Midland and Cargill, has bought Chicago-based Corn Products International Inc. for $4.2 billion in stock to add corn-based sweeteners as demand increases for soft drinks and processed foods in China, India and Pakistan, according to US media reports. This acquisition enlarged Bunge's international footprint in emerging economies to drive its growth.
Corn Products is the fourth-largest maker of high-fructose corn syrup in the U.S. and will give Bunge new customers in Pakistan, South Korea and Thailand, Credit Suisse analyst Robert Moskow said in a note on this deal. Corn sweeteners are used in soft drinks and processed foods instead of traditional cane or beet sugar because of their lower cost and higher concentration. A single 12-ounce can of soda has as much as 13 teaspoons of sugar in the form of high fructose corn syrup, according to San Francisco Chronicle. China, India and Pakistan have all seen double digit annual growth in consumption of soft drinks and processed foods for several years. Last year, the PepsiCo growth in US and Europe was less than 3% but PepsiCo International sales were up 22%, an impressive increase fueled by double-digit growth in China, Russia, Pakistan and the Middle East.
Processed foods and soft drink companies are often blamed in the United States for dramatic increases in obesity and diabetes, particularly among children. Some even accuse them of being merchants of death, not unlike the big tobacco companies. Many health experts argue that the issue is bigger than more calories. The theory goes like this: The body processes the fructose in high fructose corn syrup differently than it does old-fashioned cane or beet sugar, which in turn alters the way metabolic-regulating hormones function. It also forces the liver to kick more fat out into the bloodstream leading to heart disease.
While the presence and growth of Bunge, Pepsi and other food giants are likely to create more jobs in emerging economies such as India and Pakistan, the price for this opportunity is likely to be the danger of greater health problems associated with fats and corn sweeteners in processed foods and soft drinks.
Similar or even greater health threats are coming from the major expansion of tobacco giant Philip Morris in emerging economies. As the smoking rates in developed countries have slowly declined, they have risen dramatically in some developing counties, where PMI is a major player. These include Pakistan (up 42% since 2001), Ukraine (up 36%) and Argentina (up 18%), according to the Wall Street Journal. Philip Morris is currently building a major new plant in Pakistan.
Globalization can potentially bring many benefits, including access to more jobs and improved living conditions in the emerging economies. However, globalization also brings with it all the ills that have been witnessed in the West, including environmental deterioration and life-style diseases such as diabetes, heart-disease, various forms of cancer etc. The challenge for Pakistan, and other countries like it, is to learn from the mistakes of the West. Instead of just repeating such mistakes, Pakistan, India and China must find ways to extract the benefits while minimizing the cost of modernization.
Growing health consciousness across Pakistan is strengthening demand for low calorie carbonate substitutes and bottled water. With concerns about the safety of tap water extensive, demand for bottled water is growing strongly off the back of modest gains in per capita incomes and more importantly, more widespread product investment by leading players.
Here's a video clip of Coke Studio with Arif Lohar and Meesha:
Related Links:
Haq's Musings
Pakistan's Media Boom
Pakistan's Murree Brewery in KSE-100 Index
Health Risks in Developing Nations Rise With Globalization
Pakistan's Choice: Globalization Versus Talibanization
Life Goes On in Pakistan
Pakistan Crowned T20 World Champion
Threre are more reasons to migrate to Canada
1 year ago
5 comments:
coke pepsi sales are nothing to be very proud off!They are unhealty and very damaging.
whats more S asians are much more susceptible to diabetes than westerners are genetically so the government should actively discourage them!!
In my school cola drinks are banned! even though they are the biggest sponsors of school level competitions like quizes,debates etc kind of like tobacco companies used to sponsor sports.
Pakistani novelist Kamila Shamsie (Burnt Shadows) talked about Pakistani music with Steve Inskeep of NPR Morning Edition this morning.
Here's the NPR website report of this interview:
"Disco Deewane" means "disco crazy" in Urdu. It's also the name of a song by the brother-sister duo Nazia and Zoheb Hassan, a hit in Pakistan in 1981.
But its words spurred religious tension as Pakistan's government became even more conservative. Pakistani-born writer Kamila Shamsie remembers the music video, in which government censors wouldn't let cameras film the sensuous Nazia from the waist down.
"You had this woman and this man, who were sort of out there talking about the craziness of disco," Shamsie says. "And about a certain kind of social liberation that went away."
Many Muslims in Pakistan practice variations of Sufism, a less rigid form of Islam that's very open to music and dance. Facing waning popularity in the late 1970s, then-dictator Muhammad Zia-ul Haq ushered a more extreme Islam into the law and culture of the country.
Pop music managed to prevail. Despite heavy government censorship in 1987, Pakistani television held a competition for its viewers to come up with a patriotic song. The winning track was "Dil Dil Pakistan" from the pop group Vital Signs. It became an instant hit.
"It felt really refreshing and it felt subversive, which is ridiculous if you actually look at the lyrics," Shamsie says.
Two prominent members of Vital Signs parted ways with the group in the early 1990s, taking different directions in both music and religion. Salman Ahmad formed Junoon, a Sufi rock group which achieved widespread popularity in Southeast Asia in 1997 with their chart-topping hit "Sayonee." Meanwhile, frontman Junaid Jamshed began singing religious music and denounced pop as "un-Islamic."
"There are so many different variations of Islam," she says. "I think within the music and the stories of Salman Ahmad and Junaid Jamshed, you can see two of the more dramatic ways in which that search for religious belief can play out."
India will soon adapt Coke Studio from Pakistan for the Indian audience, according to an WSJ report:
In a break from tradition, India will soon see a television show adapted from neighboring Pakistan.
After being tried and tested on the other side of the border, Coke Studio, a music reality show which serves as a platform for musicians to perform live, is set to make its debut here later this year.
We don’t know whether the program will follow the same format as Coca-Cola’s hugely popular television show of the same name in Pakistan.
A Coke spokesman in India confirmed that the company was in talks with “several potential partners for the launch of this property” but declined to share any further details.
“At this point, we can only confirm that we plan to launch Coke Studio – one of our flagship music properties globally – in India, sometime this year,” he said.
While India has oftentimes borrowed the formats of popular TV shows like “Kaun Banega Crorepati,” based on “Who Wants to Be a Millionaire,” and “Indian Idol” from the west, it has never adapted a Pakistani television series to suit Indian audiences.
Coke Studio has already aired three seasons in Pakistan and has featured the likes of “Sa Re Ga Ma” musical talent show winner and popular singer Amanat Ali; Sufi singer Abida Parveen; and Meesha Shafi, lead vocalist of fusion band “Overload.”
Ali Zafar, the lead actor of Bollywood satire “Tere Bin Laden” and a singer, participated in the second season of the show.
The show’s popularity can be gauged by its Facebook fan page where has 458,454 users “like” it. The social networking site has over 80 official and unofficial groups dedicated to Coke Studio with anywhere between 7 and 458,283 “likes.”
There are already 178 fans of the Facebook page “I want Coke Studio INDIA.”
Here's an Express Tribune story on the music industry woes in Pakistan:
Let’s start with the record labels. There is only one active record label in Pakistan at present: Fire Records. With more than 50 artists under its belt, Fire Records enjoys a monopoly over the industry. The other big players of the industry (The Musik Records, EMI and LIPS Music — not counting Alif Records and Riot Records which only cater to individual artists) are currently dormant.
-------
However, when you read the fine print of the contract, it featured a few conditions.
For starters, the package included no monetary compensation for almost all artists. Secondly, an artist had to give up his/her rights to the music. This meant that Fire Records vetoed every decision including which song to launch when, which video to make when and when to distribute the album. Moreover, all artists signed under Fire Records could have their videos aired only exclusively on Fire Records’ sister television channels (AAG, Geo TV, etc.) unless royalty payments were made by other channels.
With blatantly anti-competitive practices, Fire Records became the sole lifeline for these top 50 artists of Pakistan. So, unsurprisingly, when Fire Records decided to decrease its output of new releases in the market, the whole industry suffered.
A good example is that of the band Mauj. Having released their first single “Khushfehmi” in 2004 to widespread acclaim, and then “Paheliyan” in 2008, the band signed on with Fire Records in January 2009 with a ready-made album in hand. However, the record company decided to postpone the album’s release. The fans waited, the band complained, and illegal free downloads soared on the web. It wasn’t until a year later in January 2010 that the album finally saw a release. But by then a lot of water had passed under the bridge – it was too late. The craze had already died.
Call suffered a similar fate. With their album ready in 2008, they had to wait till February 2011. “Laree Chootee” had truly missed the bus by then.
-----
Fire Records, the largest investor in the record label business, is also facing the crunch. In the words of the Operations Manager at Fire Records: “The days where an album could easily sell a 100,000-plus copies are over. Even mass appeal albums of artists like Shazia Manzoor are struggling to hit the lower thousands. There are very few returns to be made in an environment such as this”.
Other factors affecting record labels is the refusal of TV channels to pay any royalties on videos, and the increased influx of Bollywood songs being played on local channels which is directly hampering consumer demand for local music.
-----------
Conventionally, record labels engage with distributors and have joint investment and revenue sharing models. This is not true in Pakistan. Artists such as Jal, Ali Azmat, Ali Zafar and many others have to directly engage with Sadaf Stereo and Sound Master for the distribution of their albums. These agreements are often not legally binding contracts but simply a take it or leave it offer in which the artists are paid up front. Consequently, the artists receive no royalty per sale, have no say in where and when the albums will be placed, and cannot keep track of the quantity sold. The lack of respect for legal contracts by distributors reflects the general lack of respect for intellectual property and copyright in our country.
------------
While some established artists have managed to explore new markets through Indian record labels, new artists have struggled to overcome these enormous hurdles. Take the example of Qayaas, an amazing new band from Islamabad who produced their own album, made their own videos, and personally distributed their own printed albums to stores across Karachi, Lahore and Islamabad.
Here's an excerpt from CBS 60 Minutes story on Givaudan, the largest flavoring company in the world:
When you chug a sports drink or chew a stick of gum, you probably don't think of science. But there is a precise science - and a delicate art - behind what you're tasting. Morley Safer reports on the multibillion dollar flavor industry, whose scientists create natural and artificial flavorings that make your mouth water and keep you coming back for more.
The following is a script of "The Flavorists" which aired on Nov. 27, 2011. Morley Safer is correspondent, Ruth Streeter, producer.
As the Thanksgiving weekend comes to a close, you may feel as overstuffed as that turkey you ate. And if you're overweight - and the chances are, you are, it's probably because you eat too much, too much of the wrong stuff. Most of the wrong stuff we eat comes in a bottle, a can, or a box - food that's been processed - much of that food has been flavored.
The flavoring industry is the enabler of the food processing business - which depends on it to create a craving for everything from soda pop to chicken soup. It is Willy Wonka and his chocolate factory as a multibillion dollar industry; an industry cloaked in secrecy. But recently Givaudan, the largest flavoring company in the world, allowed us in to see them work their magic.
[Jim Hassel: So definitely an aroma, the mandarin, dancy tangerine. Real mild though. Not in your face.]
These are "super sniffers," "super tasters"...
[Andy Daniher: And more bitter.]
...on the prowl. The special forces - first responders to the call for the next best taste.
[Andy Daniher: The mandarin notes are fantastic.]
They are braving the wilds of a citrus grove in Riverside, California, where Jim Hassel - whose nose and palette are legendary - leads a Givaudan team on a taste safari. Big game hunters in search of the next great taste in soft drinks. Their inspiration? The greatest flavorist of them all: Mother Nature.
Jim Hassel: Seeing everything that's available really just drives the whole creative process.
Morley Safer: Like an artist going to Rome or something?
Hassel: Correct. Correct.
Safer: But the ultimate purpose is to sell more soft drinks or whatever?
Hassel: That's what we're in the business of, selling flavors....
http://www.cbsnews.com/8301-18560_162-57330816/the-flavorists-tweaking-tastes-and-creating-cravings/?tag=currentVideoInfo;videoMetaInfo
Post a Comment