Soon A Chaas From Coca-Cola
Coca-Cola plans to expand its distribution over the next three to five years to cover eight million outlets from five million.
The world’s largest beverage maker plans to launch products that specially caters to India amid a consumption slowdown that has gripped the nation for more than a year.
The Coca-Cola Company is testing chaas (buttermilk) under the brand name VIO and has launched a grape juice and an apple juice-based sparkling beverage under Minute Maid for its consumers in India, T Krishnakumar, president of India and South-West Asia business unit, told BloombergQuint when it visited the company’s bottling plant in Dankuni, West Bengal.
The maker of Coke has also rolled out a sparkling beverage under its masala soda brand RimZim for India and Bangladesh, Krishnakumar said. The company exports its Mazza mango drink and Thums Up to Bangladesh. It’s now looking to ship the billion-dollar fizzy drink to Nepal, Krishnakumar said.
Coca-Cola’s focus on India comes when consumers are spending less on everything from biscuits and shampoos to cars and appliances, reflected in the broader economy that is set to grow at its slowest pace in a decade. Undeterred by this, the Atlanta-based company aims to make India its third-largest market by volumes from fifth-largest at present.
The company is looking to expand its distribution over the next three to five years to cover eight million outlets from the current five million, Krishnakumar said. This will help it to achieve its target to sell a billion cases, or containers, of sodas and fruit-based drinks in Asia’s third-largest economy in the next five years.
“The dream in the next three to five years is to get to 80 lakh or 8 million outlets, which almost gives us an immediate penetration into 94-95 percent of the FMCG market,” Krishnakumar said. “That’s the aspiration.”
Coca-Cola in 2013 had announced that it would invest $5 billion in India and followed that up with another $1.7 billion (about Rs 11,000 crore) four years later for the fruit circular economy, an initiative to source native produce to be infused in its beverages, as it looks to fend off competition from rivals such as Pepsi and reach out to health-conscious consumers. To be sure, James Quincey, chairman and global chief executive officer at Coca-Cola, had earlier told BloombergQuint that the company won’t be making further investments in India till 2022.
According to Krishnakumar, the beverage maker will focus on all the three segments—mass, popular and premium—as it aims to tap consumers across price-points. The immediate future for the company, he said, was to create “depth” in its portfolio using occasion brand package price channel—providing different packages at different prices for different segments. “Whatever we bring in, we will have similar offerings across the three segments. So that nobody feels that I want to have this, but I don’t have something for me.”