The JKH group decided to enter the cola market with its own beverage while revamping its existing brands of soft drinks.
It got into the beverage business in 1991 with the acquisition of its Ceylon Cold Stores unit, with the 'Elephant House' brand soft drinks and ice creams, which was the island's top producer of carbonated soft drinks and ice cream at the time.
"We found cola as a flavour was almost 30 percent of the beverage portfolio and we were not playing in that," Gunaratne he told the 39th LBR LBO CEO Forum on the theme “Leading Customer Centric Corporate Transformations".
It was organised by Vanguard Management Services at the Cinnamon Lakeside hotel and attended by a large gathering of top corporate executives.
Gunaratne said extensive research and trials were done before deciding on the flavour, bottle design and marketing approach.
"This project took time as now we were taking someone head one. The new products was launched in December 2010 and the off-take has been good. It has now settled down to more realistic levels. Now we are at about 10 percent of the cola market as a flavour."Although sales growth was a "good sign for the first year," Gunaratne said the company was bracing for competition.
"We can't take it lightly. Both cola majors are in this country now and both are muscling up," he said, referring to the multinational brands, Coca Cola and Pepsi.
JKH has no immediate plans to market the Kik Cola product regionally and was intent on building market share locally, Gunaratne said in response to a question.
"This was mainly to serve the need in the local market. There were certain outlets which needed a cola in the portfolio for us to be present. Our aim now is building market share. We're coming out with a light version as well."
Gunaratne said the company believed there was much more room for growth in the beverage market.
"The per capita consumption of soft drinks in this country is still very low, even comparing with the region."