Soft drinks giant Pepsi and consumer products major Hindustan Lever will jointly market each other's beverages through their vending chains in India.
Hindustan Lever brands like Lipton tea, Taj Mahal tea and Bru coffee will be sold alongside Pepsi, 7UP, Mirinda and the other Pepsi brands.
The tea will be available in the cardamom, diet cardamom, ginger and masala flavours, and the coffee will be pure, cappuccino and Mochaccino.
Chairman of Pepsico India Holdings Rajeev Bakshi told Business Standard: "To begin with, we will sell Hindustan Lever's beverages in two metros. This will be extended to other cities. Apart from allowing Hindustan Lever to expand the market, it will also give Pepsi vendors additional business during the off-season, when in some areas sales trickle to one-thirtieth of that in the peak season."
Unilever, Hindustan Lever's Anglo-Dutch parent, has tied up with Pepsi for Lipton iced tea. Hindustan Lever has launched Lipton iced tea in India, though the niche product is yet to make a mark.
Sources said Lipton iced tea might later be a part of the Indian marketing alliance. "We are examining the market for ice tea," Bakshi added.
Pepsi's rival Coca-Cola has launched its coffee and tea brand, Georgia, in India and is selling the hot beverages through vending machines, and through the McDonald's chain.
Out-of-home consumption accounts for close to 45 per cent of the Indian tea and coffee market, and is growing fast. That is why Hindustan Lever and Tata Tea were trying to build the segment, analysts said. Hindustan Lever has around 15,000 vending machines.
In India, tea and coffee account for almost 70 per cent of the beverages market, while soft drinks have a mere 3 per cent market share.