77: India’s Forgettable & Forgotten National Cola

Governments sometimes need to make bread to feed their poor, but cola? On November 13, 1977, Government of India started marketing a cola called ‘77’, ‘beverage 77’, or the name most people remember it by — Double Seven. The story of Double Seven has been told many times before, but mostly based on hearsay. The following account is based entirely on facts.

First, The Old Tale

The story goes, when a coalition of parties opposed to Indira Gandhi romped to power after the Emergency, in 1977, it sent all multinational companies — including @CocaCola — packing from India, and launched Double Seven to commemorate the year of its victory. Three years later, when Indira became prime minister again, she buried the brand. Is that all there is to socialist India’s national cola?

Trouble Started Before Emergency

The story really starts in the Indira Gandhi era, before the Emergency. Coca Cola, which had set up a plant to make its concentrate in India, in 1958, was the number one fizzy drink. It had become so popular in fact that, early in 1975, Government of India was considering moving the ‘beverage base’ or concentrate industry to the ‘First Schedule’ under the Industries (Development and Regulation) Act, 1951.

Industries of national importance, such as iron and steel, used to be under the First Schedule. The government’s stated objective was to “stop outflow of foreign exchange”, and it was bad news for Coca Cola because, under Section 2 of the Act, government would control the concentrate industry. The Act said: “It is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule”.

Foreign Capital, Quit India

The storm finally broke two years later. Early in 1977, Coca Cola Export Corporation (CCEC), the Indian arm of Coca Cola Company, applied to Reserve Bank of India (RBI) under Section 29 of Foreign Exchange Regulation Act for permission to continue business in India. But on April 29, 1977, when the Janata Party coalition government was only a month old, RBI replied that CCEC would need to convert itself into an Indian company, bringing down its foreign equity to 40% or less within a year.

CCEC agreed on condition that Coca Cola Company, USA be allowed to have its quality control-cum-liaison office in India for supervising the manufacture of concentrates. When RBI rejected this condition on August 5, 1977, CCEC decided it would have to stop making Coca Cola concentrate in India.

The company sent one last request to RBI — seeking to know whether it could convert into an Indian company for making beverages other than Coca Cola and Fanta. RBI said “no” on November 8, 1977. Five days later, Double Seven started selling at Agri Expo 77 in New Delhi.

Denis Waitley (1)

Not Born In 5 Days

Of course, the government did not create everything from the flavour to the bottling and marketing of Double Seven in those five days. The details must have been worked out over months.

The formula for Double Seven was developed by Mysore-based Central Food Technological Research Institute and the concentrate was manufactured by government-owned Modern Bakeries (India) Limited. Although the market did not agree with him, then minister of state for agriculture and irrigation Bhanu Pratap Singh claimed: “It is similar in taste, colour and flavour to Coca Cola.”

Perhaps, the formula was based on this list of Coca Cola ingredients that then minister of state for industries and civil supplies B P Maurya had read out in Parliament on December 19, 1974:

  • Mixture of odoriferous substances, non-alcoholic
  • Essences containing spirit
  • Natural lemon and orange oil and other natural essential oils
  • Citric acid
  • Synthetic essential oils
  • Caramel, etc

Story Behind The Name

Was the cola named to commemorate Janata Party’s electoral victory? Possibly. But the name was a “lift”. A Pune-based private company had been making a soft drink named “77” without registering it when Member of Parliament H V Kamath suggested the same name for India’s national cola.

Pleased with the name, Modern Bakeries was all set to pay Kamath a cash award of Rs 10,000, but at the time of registration it ran into the unexpected problem of the Pune firm’s claim on the brand. After “negotiations”, Modern acquired the exclusive right to the name, but developed doubts about awarding Kamath. It had not paid him even in May 1978.

Flat Taste & Sales

Whatever the government’s claims and hopes, Double Seven was a dud from the start. Modern Bakeries only made and distributed the concentrate, leaving it to its private bottlers to look after sales. And the sales were so bad, in fact, that bottlers thought nothing of breaching exclusivity contracts.

On April 5, 1978, for instance, Modern Bakeries moved Delhi high court for an injunction against its bottler Delhi Bottling Company Private Limited, which had also been bottling a more popular rival, ThumsUp. But it later withdrew the case, deciding to terminate the contract instead.

Profits Were Rare. March 1978 ended with a loss of Rs 387,000 for the first half-year of operations. In March 1979, the expenditure had risen to Rs 3.9 million and profit to a measly Rs 93,000.

By 1983, the government stopped giving out specific profit/loss figures for Double Seven. “Modern Food Industries made aerated drinks under different brand names but did not maintain separate profit/loss accounts for them,” it claimed.

Actual sale of concentrate was-1978–79 4,018 units1979–80 8,576 units1980–81 8,988 units

Did Indira Gandhi Kill Double Seven?

No. She returned to power in 1980 and could have scrapped the brand then. Instead, a year later her government was planning to sink even more money into it by buying Coca Cola’s concentrate factory in Faridabad outside Delhi.

It was a huge factory for the time. It could produce 1,300 units or 13,000kg of concentrate per shift whereas Double Seven’s full-year sale of concentrate in 1980–81 had been only 8,988 units, and Modern Foods did not expect to sell more than 20,000 units even in 1983–84. Yet, Indira Gandhi’s government was willing to spend Rs 33.5 lakh on this factory to make a drink whose name was supposedly hateful to her.

Here’s more proof that Indira Gandhi did not kill the brand: On August 17, 1983, deputy minister in the department of electronics M S Sanjeevi Rao categorically told Parliament that the government was not considering a proposal to stop producing Double Seven.

Double Seven eventually outlived Indira, who was assassinated on October 31, 1984. When Modern Food Industries’ profit before tax for the year 1984–85 fell by 38% to Rs 13.9 million, the government on July 18, 1986 said: “In the case of bread and concentrate for aerated beverages, lower production also contributed to increase in production cost.” Aerated beverages meant Modern’s Double Seven range.

Here’s more proof that Indira Gandhi did not kill the brand: On August 17, 1983, deputy minister in the department of electronics M S Sanjeevi Rao categorically told Parliament that the government was not considering a proposal to stop producing Double Seven.

But the end was drawing near. The government promised to “undertake a critical review of the units which are not doing well and based on that, devise appropriate remedial measures.”

Double Seven was alive even in

Ten days later, Parliament was debating whether Coca Cola’s rival Pepsi should be allowed in. “M/s Punjab Agro Industries Corporation Limited have submitted an application for approval for manufacture of various processed foods in financial participation with one of the Tata companies and M/s Pepsico Incorporated of USA,” minister of state for industrial development M Arunachalam informed Parliament on July 28, 1986.

To this, MP Suresh Kalmadi retorted, “Sir, a political decision has to be taken whether we want to go to 21st century with Pepsi.”

Thankfully, we did, Mr Kalmadi. India is a very different place 30 years on.

***

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