Coke’s Cleanse

The Atlanta-based soft-drinks major is going all out to woo the Indian customer with a kaleidoscopic range of fruit and dairy-based drinks, with its popular offering losing fizz

Vishal Koul

Twenty five years after entering India, Coca-Cola India decided to have a celebration in Agra, the city where it all started in 1993. Bottlers and company executives turned up to be a part of the fun on December 11 and 12. True to tradition, most of the conversation revolved around sales volumes. It has been an interesting journey for the company starting with the launch of its iconic global brand — Coca-Cola — making a significant buyout, and several management changes. Now, they are pursuing a strategy that is more consumer-centric than ever in its history in India.

They will no more be a one-trick pony. The brand is out for a transformation with different products for different parts of India and across categories such as dairy, hydration and fruit-based drinks, touching various price points. It is stretching the equity of the brand to bring in a set of new consumers. This will be built on its age-old strength of distribution and sales muscle.

The turnaround has become essential. Growth has been hard to come by for soft-drink majors, over the last five to 10 years, with healthier options available in large numbers.

Carbonated drinks, the market for which has grown slowly at 4.31% CAGR between 2012 and 2017, drive 65% of Coca-Cola’s revenue according to industry research reports. In this period of sluggish growth, the company’s share has dropped from 60.8% to 56.3%. The market share of its closest rival PepsiCo remained unchanged at around 33%.

With changing consumer preferences, the soft drink major’s transition into a total beverages company began in India about 18 months ago. Before this strategy kicked in, in FY16, Coca-Cola India had clocked revenue of Rs.17.5 billion with a CAGR of 9.77% over a four-year period. Its bottling arm, Hindustan Coca-Cola Beverages (HCCB) in FY17 had a revenue of Rs.94.7 billion and loss of Rs.2.33 billion; for FY18 its revenue was Rs.90.6 billion with a loss of Rs.1.18 billion (see: Hitting a rough patch). Responding to a query from Outlook Business, HCCB said its numbers for FY17 “were impacted on account of adverse effects of high taxation, commodity inflation, aggressive investments in manufacturing capacity and demonetisation.” In the case of FY1


You don’t want to be left behind. Do you?

Our work is exclusively for discerning readers. To read our edgy stories and access our archives, you’ve to subscribe