Coca-Cola India is gearing up for a strong summer season with significant acceleration in production capacities and go-to-market strategy. The beverage major believes there is a huge headroom for growth in terms of retail footprint and household penetration. Sundeep Bajoria, Vice-President – Operations, Coca-Cola India & South-West Asia, told businessline, “In India, Thums Up is already moving towards becoming a $2-billion brand. Sprite is also on the same journey. We saw Maaza crossing the billion-dollar sales mark recently.”
The company is also bringing its global rehydration brand, BodyArmorLyte to India and scaling up offerings such as Honest Tea and Vitaminwater. Edited excerpts:
How are you gearing up for the summer season? What are your expectations at a time when there are concerns about an urban slowdown?
From a beverage perspective, we believe there are huge opportunities for growth. The retail outlet universe is estimated at about 12 million outlets in India. Despite having a significantly large retail footprint across channels, last year we were able to cover about five million stores. Despite making good progress in terms of growing household penetration, it is still just about 50 per cent of the households in the country.
So, the opportunity that India presents is very real. We have also seen the government give income-tax benefits recently, which will kickstart the demand cycle. So growing income levels in India, and Indian consumer’s desire for convenience and move towards packaged and branded beverage segments are factors that are helping drive growth. The onset of Summer has started earlier than usual. So we are accelerating our go-to-market plans to ensure availability of our full range of products in the market. In the last four years, there has been a significant acceleration in expansion of capacities with 100 lines added at our plants.
We have been adding three-five lakh additional outlets every year to expand our reach and we expect this trend to continue. We only have about 1.5 million coolers and continue to grow this count. We also have strong partnerships with all the quick commerce platforms.
Are there certain new launches that you are planning for this summer season?
The opportunity to grow the core brands is massive. At the same time, we keep looking at bringing new propositions to the market. We are in the process of introducing BodyArmorLyte, which is our global coconut-based rehydration brand to India. We are also scaling up brands Honest Tea and Vitaminwater. Also, we are expanding the availability of Coca-Cola Zero Sugar and Sprite Zero Sugar. The intent is to continue expanding and address all the consumption occasions in the consumer’s life.
How will the recent partnership with Jubilant Bhartia Group, which is picking up a 40 per cent stake in the company-owned bottling entity, enable Coca-Cola to accelerate growth?
We did a multi-year search to find the right partner for our HCCB franchise and that is how we zeroed in on the Jubilant Bhartia Group, where we found matching values, aspirations and ambitions. And now that we have announced the partnership, we are awaiting regulatory approvals.
What is the growth trajectory various brands in the portfolio?
In India, Thums Up is already moving towards becoming a $2-billion brand. Sprite is on the same journey. We saw Maaza crossing the billion-dollar sales mark recently, making it the third in the portfolio to achive this milestone. So, we are witnessing strong growth for all our brands.
There has been significant intensification of competition in the soft-drink segment due to new entrants.
As you heard from some of our global leaders, we actually welcome competition. Competition doesn’t only help expand the market, but keeps our system, including our bottling partners on our toes. The intensity of competition helps bring the best out in us in terms of efficiency and productivity. We have a larger footprint and more competition will only attract more investment into the sector.
Amidst inflationary pressures, has there been heightened focus on small packs and affordability?
Affordability is critical for recruitment. We want to make sure that more and more consumers are able to migrate to affordable and safe beverages that we offer. We focus on different pricing strategies relevant to different channels to address different occasions. We have a ₹50 one-litre pack, which, to my mind, would be a very affordable beverage to take home and enjoy with the family over dinner. Similarly, we have a ₹20 rupee 250-ml pack tailored as the affordable single-serve package