Keeping the fizz forever

Keeping the fizz forever

Coca-Cola has served and refreshed the Indian consumer for decades. Now with the beverages market becoming more buoyant and dynamic, the legendary American soft drink-maker has entered a phase of reinvention and resurgence, as it looks to grow with ‘health as a choice’, while ‘as sparkling as ever’.

One of the primary drivers of Coca-Cola’s strategy in India, Hindustan Coca-Cola Beverages (HCCB) – the largest bottling partner of The Coca-Cola Company, and part of its Bottling Investments Group – is responsible for the manufacture, package, distribution and sale of beverages for the company, working symbiotically with Coca-Cola India, which manufactures and sells the concentrate to bottlers, amid other responsibilities.

From 1993 to 2012, The Coca-Cola India System invested $2 billion, and in 2012, it resolved to invest another $5 billion until 2020. Almost a month ago, CEO of The Coca-Cola Company, James Quincey, stated that India could become the third largest market for the company globally, from the current sixth. And Coke is racing in that direction.

Market reach

It was only recently that HCCB made Bengaluru its India headquarters, with a focus on its South India business, and its vastly-travelled CEO, Christina Ruggiero, who is the sole American in an otherwise all-Indian workforce, candidly mentions that Coke has emerged as ‘Indian’ as it is ‘American’ today, and localisation has played its role well.

“When I travel to different states, I see our factories there and how Coca-Cola operates in those markets. I come across a rural village in the middle of nowhere that happens to have Coca-Cola, Minute Maid and Kinley, which I share with the people, becoming a part of their lives. HCCB provides products that become a part of people’s lives and creates meaningful refreshments,” she says.

In its efforts to grow the Coca-Cola brand, HCCB is aiming to participate in every diverse opportunity that the country has to offer.

“Localisation is important, not only in the country, but even in a village that’s got its own food, and wants those products that it relate to it. It’s about creating something that is locally relevant, which is just as powerful as having it globally relevant,” Christina adds.

As part of its localisation game, HCCB launched Minute Maid Pulpy Mosambi in July, which is considered to be its fastest launch, hitting one lakh outlets until now, and marking sales of over five lakh cases. Further, the company is considering fruit flavours like litchi, among others, for its Minute Maid portfolio, which already boasts of 11 variants.

About 60% of the company's product portfolio in India consists of aerated drinks, while the remaining 40% comprises non-aerated drinks like fruit juices, flavoured water, coffee, tea and packaged mineral water.

“Aerated beverages contribute to a major part of our business. However, since July, we’re seeing double-digit growth, not just in sparkling, but our entire portfolio. I am very optimistic about our performance over the last couple of years, and will continue to be in the coming years,” Christina tells DH.

Quincey, during his visit to India last year, had announced that the company will be investing $800 million over the next five years for procurement of fruit pulp and concentrate.

Elaborating on these plans, Christina says, "For F&B companies worldwide, growth is being driven by the health segment, including products like fruit juices and dairy-based drinks." Leading markets for Coca-Cola -- China, Japan, Brazil and the US -- are also witnessing growth being driven by non-aerated drinks like coffee, flavoured water and green tea-based drinks.   

Coca-Cola also intends to relaunch VIO, its flavoured milk brand, as it believes that the Indian consumer has graduated towards experimenting with non-aerated drinks. Quincey had even expressed that the company aims to have a 50:50 split between aerated and non-aerated drinks in India by 2025.

What customers want

Today, its flagship fruit juice brand Maaza is continually witnessing double-digit growth, Christina says, further indicating that a new fruit juice brand from Coca-Cola is due for launch during the festival season.

Maaza is an indication that a lot of people prefer non-aerated drinks as a means to stay afresh, or simply on the go, she opines. The brand leads a speciality segment, which has many traditional rivals such as Parle’s Frooti and compatriot Pepsi’s Slice.

“The juice industry in India is experiencing explosive growth. While the growth for sparkling is in small single-digit, juice is in double-digits. A lot of Indian consumers are shifting from fresh juice to packaged juice. There are more drinkers going for non-alcoholic ready-to-drink (NARTD); from fresh juice to packaged juice; and another, from tap to RO (Reverse Osmosis) water,” Christina explains.

Coca-Cola’s success mantra lies in taking product risks in new opportunities, while maintaining impeccable safety and quality. "We want to get good at taking risks in categories that offer opportunity," she adds. In this context, HCCB is currently running a pilot beyond its existing portfolio. Called ‘Minute Maid Perfect Fruit’, the fruit sorbet brand is in its pilot phase with 25 machines across Bengaluru.

“Currently, we are ideating on 220 different products across categories, depending on local, of which, usually a small percentage works. Of these, 20 are being tested. We’ve a 5% success rate globally,” she says.

Technology refreshed

Sustainability is key for a giant like Coke. Besides products, HCCB has been constantly evolving capabilities, automation, shared services, and building the right factories in the right places. Today, it operates 21 factories across the country.

A visit to its cutting-edge facility at Bidadi shows the level of automation the company relies upon. A lean team of 95-member factory floor has two lines – one producing 720 bottles of aerated drinks per minute, and another producing 620 bottles of Kinley water per minute. Replicating similar processes, while improving several other technologies, a new greenfield facility is expected to open early next year in Sanand, Gujarat, with an investment of Rs 450 crore.

“We’ve got the right products, right tools, and the next element we need is the right supply chain, and we are continuing to invest there too,” she says. Today, HCCB is one of largest institutional buyers of agricultural produce and fruit pulp – worth more than Rs 2,000 crore – benefiting 2.5 lakh farmers.

As it treads towards becoming a ‘total beverage company’, with a retail network of 1.9 million outlets, through a network of 4,000 company-appointed distributors, it’s always the right time to pop open a Coke can.

DH News Service

Assembly elections 2019 | Get the latest news, views and analysis on elections in Haryana and Maharashtra on DeccanHerald.com


For election-related news in Maharashtra, click here

For election-related news in Haryana, click here

DH Newsletter Privacy Policy Get top news in your inbox daily
GET IT
Comments (+)