Our attempt to source locally has a sustainable agenda: T Krishnakumar

Interview with Director, India & Bangladesh, Hindustan Coca-Cola Beverages (bottling unit of Coca-Cola)

Amid efforts to introduce affordable products in the country, Coca-Cola has increased the number of fruits it sources from India, covering bananas, guava, papaya and mango pulp. T Krishnakumar, region director (India & Bangladesh), Hindustan Coca-Cola Beverages, Coca-Cola’s bottling unit, in an interview with Viveat Susan Pinto, says in the next three-four years, the company is targeting local production and sourcing of oranges from partner Jain Irrigation. He also speaks on Coca-Cola’s initiatives in the carbonated and non-carbonated portfolios. Edited excerpts:

How successful was Coca-Cola’s attempt to locally produce oranges? Your partner, Jain Irrigation, has been working in this area for the last two years.

The oranges segment is in the lab stage. We’ve had reasonable success with whatever we have done at this stage. It will eventually see commercial scale-up but that will take a while. Cultivation of oranges of the Brazilian variety is new to India. We want to be sure before we take it forward.

What time frame have you set for commercial scale-up of orange cultivation?

We have three to four years in mind. Local production and sourcing will help us in our endeavour to build the business for orange-based products in India. While India is not a natural orange (drink) market, as is the case with mango-based beverages, in the long term, the preference for different fruit drinks will grow. We are, therefore, building the depth of our business and, at the same time, working with Jain Irrigation to see how we can bring cultivation of fruits apart from mangoes to India. Oranges is a step in that direction.

Is local sourcing and production linked to the need to increase penetration of juices? While it is a small part of your business, it is growing in double digits.

Consumers prefer multiple products. My view is if the consumers choose, we will introduce the appropriate product and work backwards with our partners, in terms of local production and sourcing. While we are happy with the double-digit growth in the fruit juice business, we have sequentially increased choices in our non-carbonated and carbonated portfolios. Our attempt to source locally, though linked to the need to give affordable products, also has a sustainable agenda driving it. We want to be at the heart of the sustainable revolution, and this explains the efforts in local production.

But most analysts insist the increased efforts on the non-carbonated beverage side in the last two years are because there is greater preference for these products. Clearly, the market is shifting.

We are seeing traction in all categories. And, the slowdown you speak of is not restricted to a single category. At the end of the day, we are speaking of an eight-month aberration and my view is the market will bounce back. We will continue to offer greater choices in two ways — increasing the categories we operate in and offering multiple packs for different occasions. Both initiatives will work in tandem.

Which are the new packs you have launched? For instance, you are again focusing on the Rs 5 price point, albeit with a slightly tweaked product. Isn’t this a response to the slowdown in carbonated beverages?

We have multiple engines of growth. In some places, we offer small portions in a paper cup. If it works, we scale up. If it doesn’t, we don’t. This is more in response to consumer needs in specific markets. We have been piloting many initiatives in the last few years and the jury’s out on this product, too. We will make every attempt to reach the consumer. This year, we have launched three new packs in our carbonated portfolio — 400 ml, 750 ml and 1.75 litre options. In juices, we have a new 750-ml pack. We have expanded an old brand called Schweppes across the country. We have launched Rhimjhim, a jaljeera-based product. We have also expanded our water footprint with a new 750-ml pack.