Muhtar Kent, global chairman and chief executive officer of The Coca-Cola Company, has announced an investment of $3 billion (Rs 17,000 crore) to help India become among the top five markets for the beverage giant over the next few years. In conversation with media in Delhi, he outlines the country’s importance in the company’s plan to double revenues over the next eight years. Edited excerpts:
You have announced an incremental investment of $3 billion in India over the next eight years. Why this increase over the commitment you made in November last year?
Our India story is one of a remarkable turnaround. Six years ago, we were not strong here. Today, our India business aspires to be among the top five countries by volume in the entire Coca-Cola system. This is a realistic goal. The per capita annual consumption of our products in India is only 12 or one per person per month, as compared to the global average of 92. The business here has limitless growth potential.
The global economy has been slowing, as are emerging markets. What are your expectations from countries such as India and China in the current environment?
India will be among the top five markets for Coca-Cola globally over the next few years. I think it is kind of wrong to say that the world is slowing, that India and China are slowing. There are a lot of numbers and as you go up, the oxygen gets thinner. So, what was produced 10 years ago as incremental GDP at 10 per cent growth is lower than what is created today at a growth rate of six per cent. Sustainable growth is more important from the sales point of view, from the demand point of view. Yes, there are some issues in the world economy, but we have invested heavily. We have been able to take advantage of the crisis since 2008 and that is why we have continued to grow, despite the macro-economic challenge.
What are the potential areas for business in India?
One of the things I see as a potential for my business is human capital out of India. We are a net exporter and great potential will come from this area. We have now what we call a plant bottle, 30 per cent of which is made from sugarcane waste. We are working on a model to convert all our waste to resources. This originated out of a thought process based in India. This year, we will be launching this in many more countries. That’s the kind of potential you see in India.
There is a lot of debate regarding health foods. How long are sugared drinks likely to drive Coca-Cola’s growth?
We have 3,500 products around the world and more than 800 of these have no calories. Another 15 per cent have lower calories. The consumer decides, we provide them with the right choices, the right marketing for these choices. We create awareness about energy balance, which is important, and we ensure that we play a responsible role in the debate over obesity. We have sparkling drinks, less sparkling drinks and no sparkling drinks, and we want to work with the government to come up with a solution for health problems related to both under-nutrition and over-nutrition. We are in the process for launching special nutrient beverages.
But what proportion of your sales do you see coming from non-carbonated beverages as part of your Vision 2020 outlook?
We are growing both sparkling and still beverages and that is why we are successful. We are providing the right choices in product formulation, packaging and dispensation. The consumer will choose.