‘Maybe Coke Should have An­tic­i­pated the Con­sumer Slow­down Ear­lier’

The Economic Times - - Business Of Brands -

bev­er­ages has been a chal­lenge. Of 1.2 bil­lion people in this coun­try, only 250 mil­lion con­sume soft drinks. Maybe we should have an­tic­i­pated the con­sumer slow­down ear­lier. I sup­pose there is a time that lapsed which we are mak­ing up for. But more than slow­down, in­fra­struc­ture is the big­ger chal­lenge. When will Coca-Cola re­turn to dou­ble-digit growth? What are you do­ing to fast-track that? I am rea­son­ably con­fi­dent it will hap­pen soon, though I can’t tell you when. Slow­down is a con­cern, but we have so­lu­tions too. What we know is that we need mul­ti­ple ap­proaches to reach con­sumers…. We are re­ori­ent­ing our­selves in con­text of the slow­down. Seg­mented ex­e­cu­tion is the key. There has to be a sep­a­rate ap­proach for ru­ral con­sumers as con­sump­tion here tends to be more sea­sonal. We have sep­a­rate re­tail and dis­tri­bu­tion ap­proaches for ru­ral mar­kets, vil­lages even with pop­u­la­tion of 200 people, teenage con­sumers, met­ros, the gro­cery chan­nel, mod­ern trade and on­line or­ders. Some ex­am­ples are splash bar (small dis­pensers within gro­cery stores) and hap­pi­ness-on-the-go ma­chines (mo­bile vend­ing ma­chines) — both are In­dia in­no­va­tions. The mo­bile vend­ing ma­chine which we pi­loted in Ahmed­abad, for ex­am­ple, dis­penses co­las at .` 5, to con­sumers who find it dif­fi­cult to buy a soft drink at .` 10. It can churn out 2,000 cups of co­las a day. How much are prices and dis­tri­bu­tion strate­gies in­flu­enced by com­pe­ti­tion, con­sid­er­ing there’s only you and Pep­siCo in this space? We bench­mark our avail­abil­ity and dis­tri­bu­tion against Hindustan Unilever, not Pepsi. Most con­sumer goods com­pa­nies have HUL as their bench­mark; so do we. We don’t re­act to com­pe­ti­tion’s mar­gins and prices…that era is over. We do what we feel is right for the cus­tomer (re­tailer) and con­sumer. The .` 8 price point, for ex­am­ple, has served its im­me­di­ate pur­pose… we are phas­ing it out for now though I can’t tell about the long term. Are co­las a de­clin­ing cat­e­gory? I don’t sub­scribe to that view. There’s no loss of share for co­las. The con­sumer wants a choice in terms of prod­ucts, flavours, cat­e­gories and packs. Di­ets have their own set of con­sumers. Is there pres­sure to take brand Coke to No 1 rank? No one has told me to push brand Coke ahead of oth­ers. We’ve two co­las and push­ing one over other is cer­tainly not some­thing we have done. Why haven’t there been any new brand launches from Coca-Cola in over five years? There’s no point in­no­vat­ing for the sake of it. We have in­no­vated on pack sizes and dis­tri­bu­tion — that we be­lieve is more im­por­tant. There is a lot of ground to cover… lot of new re­cruit­ment of con­sumers into the cat­e­gory is re­quired. But we have re­vived Sch­weppes tonic wa­ter and gin­ger ale, new vari­ants of juices and mul­ti­ple new packs of our brands.

Ratna Bhushan

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