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Inca Kola is a soft drink made in Peru. It is 60% owned by the Coca-Cola Company. It is common in parts of South America, and while it has not enjoyed major success elsewhere, it can be found in Latin American specialty shops worldwide. Inca Kola is yellowish-gold in color, and sold in glass and plastic bottles of various sizes and a can of the same color with an Inca motif.

In 1910, in Rimac, one of Lima’s oldest and most traditional neighborhoods, an immigrant English family began a small bottling company under their family name, Lindley. Through the years, this enterprise brought success and in 1928, the company was formally chartered in Peru, whereupon José R. Lindley became its first General Manager. Through friendly relations with local beverage makers, Lindley learned of an ancestral concoction based on Lemon verbena (Aloysia triphylla), Hierba Luisa in Spanish. He enjoyed the flavor and experimented with various mixtures, other ingredients and levels of carbonation until finally, in 1935, the company launched "Inca Kola" under the slogan "There is only one Inca Kola and it’s like no other" (Inca Kola sólo hay una y no se parece a ninguna), a uniquely flavored, sugary drink with low carbonation which began to take Peru by storm. By the mid 1940s, Inca Kola was already a market leader in Lima, and, thanks to innovations introduced in 1945, bottling volume expanded greatly, growing steadily and positioning it as a traditional Peruvian drink, using national and indigenous iconography and images. Through the late 1950s, Inca Kola enjoyed an enormous surge in national consumption, reaching levels of 38% market penetration by 1970, eclipsing all other carbonated drinks in Peru and firmly establishing itself as "Peru’s Drink" (La Bebida del Perú). A common logo in the late 1970s and early 1980s featured the slogan "Made of National Flavor!" (¡De Sabor Nacional!), later changed to "The flavor of Peru" (El Sabor del Perú).

In the early years, Inca Kola began to slowly erode Pepsi and Coca-Cola’s market share through aggressive marketing and low prices. Its standing as the only national drink greatly helped to win over customers as more and more people converted to nationalism, price and flavor reasons. The combined marketing muscle of Coca-Cola and Pepsi could not unseat Inca Kola as the most popular drink. Inca Kola began a marketing campaign that offered money and marketing assistance to small and medium-sized restaurants. Additionally, the brand focused its marketing efforts on campaigns to persuade consumers that Inca Kola was a better complement to food than Coca-Cola or Pepsi.

In the 1980s, Pepsi’s campaign "Pepsi Challenge" (El Reto Pepsi) backfired and helped to virtually destroy the Pepsi brand in Peru, due in large part to the fact that consumers did not enjoy being told they were wrong. The campaign established tasting centers in and around Lima where people could freely participate in a blind taste test between Pepsi and Coca-Cola. Attendees were presented with two covered bottles and two glasses, each bottle was opened and poured into its respective glass, whereupon the tester was asked to drink each and declare his or her favorite, but not before being asked which brand they preferred and drank regularly. The campaign proved to be a disaster; three results came from the testing, all detrimental to Pepsi: 1) People were angered by the fact that they were "wrong" in their choice and abandoned Pepsi, switching to either Coca-Cola or Inca Kola; 2) Those who chose Coca-Cola over Pepsi either switched to or stayed with Coca-Cola; 3) those who were ambivalent between them overcame their ambivalence and aligned with Inca Kola. Additionally, the costs of the Pepsi Challenge, which started to run into the millions of US dollars, coupled with managerial mistakes left CEPSA, the local Pepsi licensee, virtually bankrupt.

A "fact" that has been repeated many times in Lima, yet the only source is a television interview with an employee of a local polling firm, is that over 80% of the people who took the taste test chose Coca-Cola, this being attributed to the fact that Coca-Cola had long since changed the formula for Peru (one of only three countries with that privilege), adding more sweetener to the mix in order to better fit the local palate. As a result of this campaign, Pepsi’s market share dropped to a virtually non-existent 3%, and remained as low until Pizza Hut, Kentucky Fried Chicken and other Pepsi properties established themselves in Peru, selling only Pepsi products in their locales. As a result of the Pepsi debacle, two rivals were left in Peru to battle in the soft drink wars, Coca-Cola, with a 21% market share, and Inca Kola with the lion’s share of 35%. Coca-Cola aggressively marketed its drink in all places, from the smallest corner store to the largest sporting event in Peru. Attempting to reinvent itself as a drink to be enjoyed with foods, a massive marketing spree tying Coca-Cola to any and all possible meals was begun, going as far as promoting itself along other brands, restaurants and placing "Coca-Cola Girls" in every possible corner of Lima.

This reached ridiculous proportions when even tiny corner stores had red and white jump suited models urging people to buy Coca-Cola. The closest Coca-Cola ever got to Inca Kola was in 1995, when they were neck and neck with 32% and 32.9%, respectively. First, Bembos, a national fast-food chain, switched from Coca Cola to Inca Kola after failing to reach an agreement. The restaurant offered better service and a flavor more in tune with national tastes. It forced Bembos to switch brands almost overnight. Later, when the two companies joined, Bembos began to sell both Coca-Cola and Inca Kola side-by-side. Second, and as a result of Bembos and market studies, McDonald’s forced Coca-Cola to allow Inca Kola to be sold in its locales. This was the final blow, as Inca Kola had been able to come between McDonald’s and Coca-Cola.

In 1997, the Coca-Cola Company began to negotiate with the Lindley Corporation, looking to buy it out, as the Lindleys had been shopping around for a partner. A deal was established in 1999 where Coca-Cola bought 50% of the Inca Kola Corporation and 30% of the Jose R. Lindley Corporation for 300 million dollars, and ceded all bottling rights for Coca-Cola products in Peru to the Lindley Corporation; a joint-venture agreement was forged for foreign markets, whereby Coca-Cola would use its marketing power to push Inca Kola in other countries. To date, Ecuador and the United States (mostly New York and the rest of the Northeast) are two of the countries where Inca Kola is bottled by the Coca-Cola Company.

During the time that the two giants were negotiating, various smaller companies began to emerge in Peru, selling drinks that competed both with Coca-Cola (Peru Cola, Cola National, Inti Cola, Kola Real, etc.) and Inca Kola (Don Issac Kola, Triple Kola, Concordia, Oro etc.). These competed mainly on price, since, by reverse engineering, they had all come up with formulas that emulated the originals almost undiscernibly. They began to quickly eat up market share in low-income sectors of the country with down-home advertising, which appealed to those families. Their main point of attack was the fact that Inca Kola was no longer a Peruvian company, having sold out to a foreign company, and therefore not deserving of their money. But the Inca Kola brand was so strong at that point that no manners of advertising attempts were able to break it. During 2004 José R. Lindley started talks to buy out Embotelladora Latinoamericana S.A, who held the Coca-Cola KO franchise in Peru, owned by Embonor, a Chilean bottler. As a result, in early 2005 a deal was struck for some 150 million dollars, which resulted in the consolidation of the Coca-Cola system in Peru. José R. Lindley now markets all the Coca-Cola products as well as Inca Kola, with a combined market share of around 60%. Currently, the situation stands with Inca Kola as the leader and Coca-Cola second, with the surprising Añaños Group and their Kola Real as a close third. Overall, the Coca-Cola system leads the market.

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