Mumbai: Coca-Cola India, which has clocked six consecutive quarters of double-digit revenue growth, is set to become the fifth largest market by volume for The Coca-Cola Company. India, which is currently the sixth largest in the Coca-Cola network of countries, is expected to dethrone Japan to enter the league of top-5 markets for the beverage giant by the end of the year.
In an exclusive interaction with TOI, Coca-Cola CEO and chairman-designate James Quincey said India is on track to become the fifth-largest market in terms of volume. Getting from fifth to top-three, however, won’t happen overnight, he said. The top four markets for the Atlanta-based, $32-billion global beverage major are the US, Mexico, China and Brazil.
“In India, we’ve certainly done better over the last couple of years in terms of driving the top line and the bottom line, improved innovation and marketing. We’ve started with the right foot forward this year,” said Quincey, who was in Mumbai to attend the wedding of billionaire Mukesh Ambani’s son, Akash.
Quincey, who has been nominated as chairman of Coca-Cola Company with effect from April this year, recently projected a modest growth outlook for 2019 as compared to 2018, given global uncertainties. “In general, the developing and emerging markets will continue to do well in 2019. Our experience and expectation with the developing and emerging markets is that it’s never going to be a straight line. There’s always a greater degree of volatility and I think that comes with the territory, and it’s something that we are used to and we have good experience in adapting to. The emerging markets, having done better after the financial crisis for a while, then did soften. They came back a bit in 2018. Clearly, there are some that are still under pressure,” he said.
For India, specifically, Quincey said the current year will be good.
Coca-Cola India and Southwest Asia President T Krishnakumar said the company had a balanced growth across portfolios, driven largely by Thums Up, Sprite and Maaza. A quarter of the revenue growth in India has come from new products. “We made commitments in 2010 to invest $5 billion by 2020. That’s on track,” said Krishnakumar.
The growth has been aided by the newly adapted concept of ‘Fruit Circular Economy.’ In 2017, Coca-Cola India committed $1.7 billion (Rs 11,000 crore) towards the Indian agri-ecosystem for the next five years. Since 2017, the company has procured in excess of 500,000MT of Indian fruits worth over Rs 1,350 crore. In addition, an investment of around Rs 2,200 crore has been made across the supply chain.
Coca-Cola recently completed the $5.1-billion global acquisition of Costa Coffee, which brings hot beverage to its portfolio and adds to Quincey’s mission of converting Coca-Cola into a “total beverage company”. In India, where a PepsiCo bottler is the master franchise of the coffee chain, Coca-Cola will have to work out the details. “We’re going to do everything in a methodical way,” said Quincey.
Another brand that could have boosted Coca-Cola’s “Total Beverage Company” vision was Horlicks, for which Coca-Cola was one of the bidders. Horlicks was recently acquired by Unilever. “We decided it wasn’t for us at the price that the deal was likely to happen. That doesn’t mean that the next step is to go and chase that organic. We’re going to stick to our main game plan and we look at these things (acquisition opportunities) as and when they come up. And if they work for us, then great. And if they don’t, we go back to our main game plan. We have had a successful global strategy of finding iconic local brands that have succeeded in that country or region and haven’t been able to go to lots of countries,” said Quincey.
This article was originally published in Times of India