Billionaires: Mukesh Ambani adopts old strategy to take on Coke and Pepsi

Indian industrial company Reliance is reviving a historic local cola brand with plans to use its vast retail network and slash prices to challenge US beverage businesses PepsiCo and Coca-Cola in a key market. Controlled by billionaire Mukesh Ambani , Reliance this month launched revamped Campa drinks, sugary sodas popular in India in the 1970s and 1980s before disappearing from shelves as the US companies expanded rapidly in a liberalising economy. At first glance, it may seem that Mr Ambani will find it tough to loosen Pepsi’s and Coca-Cola’s stranglehold of a market Euromonitor estimates is worth $4.6 billion and set to grow 5 per cent a year until 2027. Other tycoons have tried to go toe-to-toe with the drinks companies and failed, most notably Richard Branson with his Virgin Cola . But Asia’s richest person famously disrupted India’s telecoms market seven years ago with cut-throat pricing to make Reliance the leading player in that industry. And he is applying some of that same strategy in his soft drinks venture. "Coca-Cola and Pepsi are unused to a nationwide challenge, and Reliance has the financial muscle and reach to challenge them with a local brand with high nostalgic value," said Amulya Pandit, a consultant at Euromonitor International. Reliance’s plan aims to open some factories of its own or as joint ventures to produce Campa, and take the soda to hotels, restaurants and in-flight sales, according to a source. Production of Campa is currently outsourced, after the $2.7 million acquisition of the brand last year. The company is heavily discounting in-store prices. A two-litre Campa Cola bottle is priced at 49 Indian rupees (60 US cents) in shops, a near 50 per cent discount on its label price and about a third lower than 2.25-litre Coke and Pepsi variants, a Reuters check showed. The smallest bottles of Campa Cola and Coke both cost 10 rupees, while Pepsi starts from 12 rupees. “The price will be disruptive across,” said the source, who added that Reliance is planning an advertising spree during the coming IPL cricket tournament and is in talks with at least three teams to make Campa their refreshment partner. Coca-Cola said it had broadly kept prices of its small bottles unchanged since last year and was focused on expanding distribution. "Having new players in the market presents a great opportunity for investments to develop the market further," it said. Reliance, India’s top retailer, will supply Campa to its 2,500 grocery outlets and thousands of smaller non-network shops as part of its new consumer goods push, from which it has set an internal target of $6.5 billion in annual revenue within five years. The company also has a grocery shopping app and a wholesale division through which it supplies consumer goods to 500,000 small shops. Reliance's cola and consumer goods foray is being driven by T. Krishnakumar, an executive who worked for nearly 17 years at Coca-Cola in various leadership roles. MacKenzie Scott is launching a $250 million “open call” for community-focused non-profits that the billionaire philanthropist can fund. Through her organisation, Yield Giving, Ms Scott plans to make unrestricted $1 million donations to 250 non-profits selected in the process, which she calls a “new pathway to support organisations making positive change in their communities”. To apply, the non-profits must have annual operating budgets larger than $1 million, but less than $5 million for at least two of the past five years. “Teams on the front lines of challenges have insights no one else can offer,” Ms Scott said. “So, there are three big headlines here in my heart: Community change-makers can nominate themselves. Community change-makers get feedback from their peers. Community change-makers have a powerful role in funding decisions.” The open call marks the first time non-profits can reach out to Ms Scott for potential funding. Until now, Ms Scott and her team secretly contacted organisations they were interested in funding first, then offered them unrestricted donations after receiving information about the group’s work and financials. Since 2019, when she pledged to donate the majority of her wealth, Scott has given more than $14 billion in unrestricted funds to 1,600 non-profit organisations. Scott is currently worth more than $26 billion, according to Forbes . She said that she is excited to enter into a partnership with non-profit Lever for Change, which will manage the open call process to find community-focused organisations advancing people of modest means and groups who have experienced discrimination and encountered other systemic obstacles. “This open call is designed to empower and strengthen communities across the United States that are often overlooked,” said Cecilia Conrad, chief executive of Lever for Change, an affiliate of the John D. and Catherine T. MacArthur Foundation. “We are looking for organisations that are making a meaningful difference in people’s lives. The awards will recognise teams that demonstrate the potential to make progress toward reducing disparities in health, education, economic outcomes, and other critical issues.” Organisations need to register to apply before May 5 and complete their applications by June 12. The applications will be reviewed by peers, who will select up to 1,000 finalists. Those finalists will then be evaluated by a publicly named panel selected for their related experience. The 250 winners will be announced in early 2024. Ms Scott does not discuss the reasons behind her philanthropy, beyond essays on her website. However, some experts have said the open call process is a continuation of her desire to change philanthropy. Phil Buchanan, president of The Centre for Effective Philanthropy, said when Scott originally announced her open call plans in December that her approach says: “We as donors can yield to those talented people in non-profits working closest to communities who know best what is needed and how to do it.” John and Patrick Collison became two of the world’s richest millennials over the past decade as Stripe’s valuation surged more than 5,000 per cent — an ascent emblematic of the easy-money era. It has not been so easy of late. The wealth of Patrick, 34, and John, 32, has nearly halved since a 2021 funding round valued the payments company they founded at $95 billion, making it the biggest US start-up at the time. The company last week revealed a much lower $50 billion external valuation after raising money from investors, including Peter Thiel’s Founders Fund. The brothers are now worth about $5.9 billion each, down from a combined $23 billion two years ago, according to the Bloomberg Billionaires Index. The rapid decline in the Irish siblings’ wealth underscores how rising interest rates and surging inflation are hitting the fortunes of technology billionaires. Stripe, which has its headquarters in San Francisco and Dublin, has repeatedly cut its internal valuation in recent months and slashed more than 1,000 jobs to prepare for what the brothers called “leaner times” in an email to employees in late 2022. The company is using the $6.5 billion it raised in its latest funding round to pay the taxes of long-standing staff. Stripe has told potential investors it will turn a profit this year. The Collison brothers sold their first company for $5 million when they were teenagers and founded Stripe in 2010 after dropping out of college in the US. Before last week, they were worth $7.5 billion each, based on Stripe’s internal valuations for its stock, according to the Bloomberg Billionaires Index. The company, which sells software allowing businesses to accept online payments, held a seed round in 2011 from investors such as Elon Musk and revealed a valuation of $1.8 billion with its series C funding round three years later. The value then surged to $20 billion during a 2018 series E round led by Chase Coleman’s Tiger Global Management. Even with their recent wealth slump, the Collisons are still the only self-made billionaires under 35 among the world’s 500 biggest fortunes. UK aristocrat Hugh Grosvenor, 32, and Red Bull heir Mark Mateschitz, 30, inherited their riches.

Billionaires: Mukesh Ambani adopts old strategy to take on Coke and Pepsi

In our fortnightly round-up of the world’s super wealthy, MacKenzie Scott makes open call to donate $250m to non-profits and net worth of Stripe founders plunges