Thanks to refranchising, Coca-Cola gains $293 million in India in Q1
Despite a slow start, sees a strong year for the India business
Beverage major Coca-Cola on Tuesday said that it recorded net gains of $293 million by refranchising company-owned bottling operations in certain territories in India in the March quarter. It also said despite a slow start, it expects India business to witness a strong year ahead.
In January, Hindustan Coca-Cola Beverages Pvt Ltd, the bottling arm of Coca-Cola Company in India, announced that it has divested bottling operations in Rajasthan, Bihar, North-East and select areas of West Bengal to its independent bottlers in the country.
In its global earnings release for the first quarter of CY24, the company said, “During the three months ended March 29, 2024, the company recorded net gains of $599 million and $293 million related to the refranchising of our bottling operations in the Philippines and in certain territories in India, respectively. The company also incurred $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India.”
INDIA OPERATIONS
Speaking at an investor call on Q1 earnings, James Quincey, Chairman and CEO of The Coca-Cola Company, said that the India business momentum was impacted by some temporary factors, but recovered at the end of March.
“The one that was atypical or at least compared to recent quarters was India.. It had a slower start in January and February. As we have talked in previous calls, we are very bullish on the long-term prospects for the India business. We are also very clear it is not going to be a straight line or a metronomically consistent growth.” He added that after softer demand in January and February, the momentum has bounced back in March and April. “So we expect to see India to continue to have a strong year” ahead, Quincey added.
Talking about its AI strategy across countries, the beverage major said in India, retailers are leveraging AI-powered suggested order recommendations on Coke Buddy.
In January, the company refranchised its bottling operations in Rajasthan market to Kandhari Global beverages, while the Bihar market is operated by SLMG Beverages. Meanwhile, bottling operations in North-East market and select areas of West Bengal are operated by Moon Beverages Pvt Ltd.