The product idea forms
In the mid-2010s the Indian beverage market was dominated by global beverage brands that offered mostly cola, lemon-lime, and fruit-based beverages. At that time, three enterprising cousins, Saurabh Munjal, Nikhil Doda, and Saurabh Bhutna, were scouting for business ideas,and learnt a few facts about the Indian beverage market. They realised that Indians – mostly from rural and semi-urban India and some even from urban areas – had consumed not colas while growing up, but various tangy, spicy, and savoury beverages such as Jaljeera, Shikanji, and Banta. These traditional Indian beverages were offered by thousands of unorganised players across India. However, they were often produced in unstandardised, sometimes unhygienic settings, and their flavours were inconsistent.
Thus, the cousins recognised a market gap – the lack of strong organised players who offered beverages tailored to local Indian palates and that resonated with rural consumers. They learnt that the traditional Indian beverages had never been manufactured or sold at a commercial level. There had never been any major well-organised player who had endeavoured to offer these traditional beverages as a reasonably priced, quality product.
They then developed a spiced carbonated beverage containing various Indian spices – reminiscent of traditional homemade Indian beverages called Lahori Zeera. They decided to then start a venture and launch just that one product at first, as it meant that they could manage the costs and production around that product better. In 2017, Lahori Zeera was launched in just one market – Ludhiana, a major industrial center of Punjab.
The competitive strategy – pricing and distribution
The cousins gathered that the key factors on which Lahori Zeera could compete with the Cola giants – Coke and Pepsi – that held 82% of the entire Indian carbonated beverage market, was price and distribution. They knew that they could never match the marketing blitzkrieg of those companies and the brand equity that they had built over decades was a tough nut to crack.
The cousins learned that despite the Indian beverage market being highly price sensitive, the Cola giants had vacated the Rs. 10 price point in their effort to shore up volumes. They then decided to offer Lahori Zeera at Rs. 10 for a 250 ml pack, which was almost 40% cheaper than the leading beverage brands that offered 300 ml for Rs 20. To offer at that price point, the cousins had to adhere to strict unit economics. (See Figure I for Zeera’s Unit Economics).
They ensured that the beverage remained budget-friendly without compromising quality. As they had to sell at Rs. 10, they built everything backwards — from production costs to distribution margins — to make the model profitable. One of the most critical decisions that the cousins took was to control freight – an element that had the capability to eat into margins – so they built their own production plant close to demand hubs. Later on, as the demand grew, they adopted the co-bottling model, wherein co-bottlers across markets had to adhere to strict quality standards and follow the brand guidelines for production and even take up the task of product distribution.
The cousins focused on selling Lahori Zeera through the trade-led model (strong partnerships with distributors, wholesalers, and retailers) as 90% of the beverage sales in India happened through that channel. Lahori Zeera’s retailers were mostly urban kirana stores; stores in tier-2 and tier-3 towns and rural belts; and roadside food stalls on highways. They did not spend anything on promotions and advertising, preferring to rely instead on organic buzz.
Market success and investments
Within a very short time, Lahori Zeera had become a household favourite, especially for in-home consumption and it began to be offered in newer areas in Punjab. Zeera’s sales grew from 10 million bottles a year to 10 million bottles monthly, with the company eventually clocking revenue of around Rs. 0.4 billion in FY22. That year, Zeera made its first profits of Rs 30 million. It then caught the attention of investment firm, Verlinvest, which invested US$ 15 million – one of the largest rounds for a beverage company. That provided the company with the much needed funds and allowed it to scale appropriately. It then channeled the funds into three key areas, namely, capacity extension, wider distribution, and product innovation.
Gradually, Zeera expanded its presence beyond Punjab (where it was present for the first five years) to 16 states. It managed to produce five million bottles daily doubling its distributor network to over 2,000, and increasing the number of retail touchpoints to over 0.5 million kirana stores. Zeera then focused on product line extension, coming up with new flavors such as Masala Cola (carbonated cola and black salt concoction), Shikanji, and Imli Banta. The company introduced these new flavors based on the feedback it received from its distributors and retailers. Based on ground feedback, sales data, and repeat purchases, Zeera even made certain product modifications and withdrawals.
By FY 2024, Zeera’s revenues had crossed Rs. 3 billion. However, the company learnt that though consumers were buying its product, they did not feel a sense of pride in consuming it. Hence to create an aspirational value and also to have larger brand awareness across India, the company launched its debut media campaign – Har Koi Peera, Lahori Zeera.
The tough road ahead
The Indian beverage market had very high scope for growth, considering the fact that the per capital consumption of beverages in the country was low compared to that of other countries. Analysts observed that in recent years there had been an exponential rise in the demand for beverages with traditional Indian flavours, especially among younger consumers who were more willing to try newer brands and formats, especially those that offered something distinct from legacy offerings.
In May 2025, in a Series B round, Zeera raised capital of Rs. 2 billion from Motilal Oswal Financial Services Ltd. This took Zeera’s market capitalisation to Rs. 28 billion. Zeera planned to use the funds to have an omni-channel presence through entry into new retail formats. It also planned to launch new products in the future to have product diversification. It then set up a dedicated R&D centre to develop new ideas and flavours. In addition, Zeera was focused on expanding into the Gulf countries, Southeast Asia, and Africa, as part of an international growth strategy.
Nonetheless, several analysts thought that Zeera was still a small player that operated in a sub-segment of the carbonated beverages market and it had a long way to go before being counted as a worthy competitor to the global cola giants. They also pointed out that Zeera’s success had spurred various FMCG companies to introduce their own versions of spiced carbonated beverages, which was expected to further add to its competitor woes. They believed that to compete effectively in the future, Zeera had to increase spending on brand building, apart from enhancing its production and distribution capabilities.
Can Zeera effectively stand up to the rising competition and scale its operations? Can Munjal – who served as CEO – ensure that the desi unicorn emerged as a beverage giant in India?
(The case author, V Namratha Prasad, is Faculty Member, ICFAI Business School Case Research Centre)
Case Analysis: Can Lahori Zeera beat the Cola giants at their own game?
What are the key challenges plaguing Zeera? Being both a disruptor and a challenger, what strategies can the company adopt against the competition?
A. Even though Zeera found market success, it faced various challenges which could restrict the brand’s future growth. Some of its key challenges are:
1) Heavy competitive pressure: Zeera operates in a newly developing niche in the overall carbonated beverage segment of the Indian beverage market that is dominated by multinational cola giants. These companies have vast distribution networks, strong manufacturing capabilities, brand equity built over decades. In addition, there are various FMCG companies that were making a foray into the Indian carbonated beverage space with their own products.
2) Low consumer awareness: The company’s beverages are popular in most northern and western states, but are not known across India, as it does not have a presence in certain markets.
3) Operational challenges: As the brand grew, managing the supply chain, production scaling, and maintaining quality at larger volumes could become more complex. Zeera’s strategy of using co-bottlers – though advantageous – opened up the possibility that there could be variations in the taste and quality of its beverages.
4) Lack of an omni-channel presence: In the competitive consumer market, especially in the F&B sector, it is essential for brands to engage with customers across multiple touchpoints – whether online, offline, or through mobile apps. Without an omni-channel strategy, Zeera risks losing out on a large segment of consumers who prefer shopping online, especially younger consumers and urban professionals.
Zeera had the first mover advantage in the sub segment of the carbonated category – ethnic/traditional flavoured beverages. Zeera should adopt the competitive strategy of “Differentiation” to succeed against the cola giants. It could take the following strategies to increase its chances of overall market success.
1) Market positioning: Zeera could further tap into India’s Ayurvedic and herbal traditions and introduce new flavors. That would lend credibility to the brand and build up its image as a brand that understands Indian sensibilities. In its marketing and promotions, Zeera should leverage India’s cultural heritage. It should promote its beverages as a revival of traditional Indian beverages with modern packaging. These aspects are something that would be unmatched by the Cola giants.
2) Target different consumer groups: Several studies (including Euromonitor International) show that carbonated beverages are not generally preferred by women and children, Zeera could consider targeting those customer groups as its flavour profile could be attractive to them.
3) Focus on the health aspect: Zeera could advertise its beverages extensively as a healthier alternative in the carbonated beverages market, as its beverages have functional benefits. These aspects could never be matched by the leading players in the carbonated beverage market, which are facing rising criticism for offering unhealthy products.
2. Devise tactics to scale Zeera’s business
1) Zeera should continue focusing on its trade-led model that had hitherto provided it with good dividends and enabled it to capture the market quickly. In fact it should replicate its strategy across India for its new products as well.
2) In rural areas and other markets in which Zeera sold most products, local influencers and word-of-mouth marketing impacted purchasing decisions significantly. Zeera could try and adopt strategies to garner their support.
3) It should weave a brand story or create a mascot which will create market appeal.
4) Zeera could adopt an omni-channel presence and do economical digital marketing to gain further market access, especially in urban areas.
5) It could leverage social media for promotions to target younger audiences.
6) Zeera could try to enter the fast-growing functional and healthy beverages segment. Later, it can garner distribution contracts at schools, airlines and Indian Railways, by using the positioning as a healthy carbonated beverage.
7) It could research traditional beverages in the southern, eastern and western parts of India and then launch them to have greater penetration in those markets.
Published on March 5, 2026