Covid-19 impact: WFH consumers are the real thing in new Coke plan

Adapting to the needs of the changing lifestyles of consumers, Coca-Cola India is effecting changes in its business model. The country’s largest aerated drinks company is focusing on driving in-home consumption — deviating from its out-of-home strategy.

It is planning to do so through new products and by ensuring doorstep availability, said a top executive.

T Krishnakumar (KK), president, Coca-Cola India and Southwest Asia, said the Covid-19 crisis, and the lockdown that followed, has changed consumer behaviour. He said realigning Coke’s strategies to meet the new normal will be key in the coming days. “One of our biggest learnings is that in tough times, one needs to invest more in every way, and that’s one of the keys to long-term success,” he said.

“At-home consumption is robust and growing. We are working on this (segment) with multiple business models through our bottlers and customers, and are making significant progress every week.”

The change in strategy is significant, given away-from-home consumption continues to drive the majority of Coke’s volume and contributes over 60 per cent towards the firm’s top line. Coke, along with its bottling partners, sell over Rs 15,000 crore worth of soft drinks every year in India.

The move comes after the lockdown significantly impacted its business as out-of-home consumption suffered with people staying in-doors. “Since India is a largely consumption-based economy, a pullback in overall consumer spending does impact businesses and the overall economy,” he said. 

Krishnakumar said the firm’s long-term investment plans remain intact. It has not laid-off any staff or initiated salary cuts. While the economy is opening up, consumption in channels like travel, restaurants, and hospitality may take a little longer to come back to normal. 

The Covid-19 pandemic has also forced the firm to initiate changes in its channel strategy, as consumers shift their buying behaviour. Coke expects local grocers, who have played a crucial role during the lockdown, to continue to play a central role.

According to Krishnakumar, urban consumers, with better purchasing power, are inclined towards newer platforms for purchase like e-commerce and are more open to newer products. “Hence, innovative ways to reach the consumer along with affordability will be important to drive demand.”