Coca-Cola, the largest beverage company, wants to make India its third-largest market in the world, chairman and global chief executive officer (CEO) James Quincey has said.
On his third visit to the country, Quincey (55), also indicated that the India business had touched 1 billion in unit sales in calendar year 2019. The local arm of the Atlanta-headquartered firm was now looking to double volumes to two billion (in unit sales) within five years, he said. The statement comes as the domestic market continues to be wrecked by a consumption slowdown, which is showing no signs of abating any time soon.
Quincey said a ‘short-term’ blip in consumption does not affect the company’s long-term plans for growth. “India is one of the strategic markets for The Coca-Cola Company. It continues to make a strong contribution to global results, presenting opportunity and growth potential,” he said.
“We are transforming to becoming a total beverage company with strong local roots. In the past two years, the portfolio of beverages has expanded in a segmented manner,” he said.
As things stand now, India ranks fifth in the world for Coca-Cola, ahead of Japan. It lags behind the US, Mexico, China and Brazil, which are Coca-Cola’s top four markets globally. Coca-Cola has both carbonated and non-carbonated drinks in India, which according to Quincey has been clipping at a ‘strong pace’.
Coca-Cola is now betting on categories such as enhanced hydration, dilutables and low-calorie drinks, Quincey said. Analysts tracking the company said the India business of Coca-Cola has registered steady volume growth for at least two years now, led by its carbonated and non-carbonated product portfolio. The combined revenue of Coca-Cola’s domestic bottling and marketing operations, according to regulatory filings and analysts, stands at over Rs 13,000 crore for FY18-19.
In December, Coca-Cola had realigned its bottling operations in North India, transferring four territories to existing bottlers.
The company has declined speculation that it proposes to exit bottling operations in India altogether, saying that it will continue investing in all aspects of the business.
In 2012, Coca-Cola had announced plans to invest $5 billion in India by 2020. “These investments are on track,” said Quincey, adding that an additional $1.7 billion committed towards building a “fruit circular economy” in the country would be closed ahead of its 2023 deadline.
Quincey also said the company would continue to push “smaller packs, drive innovation and roll out local drinks and flavours” in line with its global strategy.
In India, for instance, the company was aiding cultivation of mangoes, apples, grapes, litchi and oranges, used for its juice portfolio under Minute Maid.
The company is also looking at reducing sugar in its drinks amid growing demand from consumers for the same. The sugar content in Maaza and Thums Up, for instance, had been reduced in the past eight months, Quincey said.