Coca Cola Co. crates sit stacked at the company’s bottling plant in Mehediganj, Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Coca-Cola Turns Apple Grower In Push Beyond Sugary Sodas

Coca-Cola India Pvt. Ltd., looking to grow beyond sugary sodas, will help cultivate more apples in the world’s sixth largest-producer of the fruit as it looks to source locally for its fruit-based drinks.

The world’s No. 1 beverages company partnered Indo-Dutch Horticulture Technologies Pvt. Ltd. under an initiative named Project Unnati Apple, it said in a statement. The two will set up 110 orchards in the northern hilly state Uttarakhand—Coca-Cola will use the produce to meet its fruit-pulp needs.

India ranks second in terms of area under apple cultivation, yet it imports the fruit and its concentrate as the average productivity per hectare is low, the company said. “Project Unnati Apple is designed to act as a catalyst in helping India achieve self-sufficiency in apple production,” said T Krishnakumar, president of India and South-West Asia of The Coca-Cola Company.

The U.S.-based giant has been investing in fruit-based beverages as consumers worldwide switch to healthier options. More than a year ago, the maker of Coke committed to invest Rs 11,000 crore (under $2 billion) to create a fruit-circular economy in India by sourcing fruits locally and diversifying its portfolio. That comes when the growth of sweet carbonated drinks has slowed in Asia’s third-largest economy.

Research firm Euromonitor International expects the sales of sodas in India’s Rs 33,000-crore market to grow at an annualised rate of 3.4 percent by 2022. That’s half the pace of the previous five years.

Coca-Cola India, however, said it’s still growing at a strong pace. The company witnessed double-digit growth in its core sparkling drinks business, where it’s keeping its mojo, T Krishnakumar, president of India and South-West Asia of The Coca-Cola Company. “We’ve had four straight quarters of double-digit growth.”

A Diverse Portfolio

Yet, it’s been aggressively diversifying its portfolio. The beverage maker has been testing a fruit-infused Fanta in Gujarat and Minute Maid using domestic oranges—called Minute Maid Santra. Last year, it launched Minute Maid Mosambi (with sweet lime), Maaza Gold and Maaza Refresh (both with mangoes), all of which are locally sourced.

In May, it launched Minute Maid Vitingo, a Rs 5 sachet of an instant drink mix fortified with vitamins and micro-nutrients “to address the issue of malnutrition”; and Aquarius Glucocharge, a glucose drink to combat exhaustion and dehydration, priced at Rs 10 for a 200 ml pack.

The cola major looks to launch more nutrition-based products at affordable prices for the rural market. It wants to offer more variety to the urban Indian consumer even as it focuses on making its drinks more affordable for rural India.

“In rural markets, it’s about creating a portfolio which is not only affordable, but which gives some benefits beyond just quenching thirst,” Krishnakumar said. “We’ve been trying to develop this portfolio in the last one year or so.”