Coca-Cola India to play by volume
The global major eyes to roll-out a top line management system in 14 domestic markets
India will be among key markets in the Asia-Pacific region where the world’s largest beverage company, Coca- Cola, is expected to pay more attention as it looks to drive growth.
Addressing investors during a recent concall, James Quincey, who took over as the president and chief executive officer (CEO) of the company in May, said the firm would roll-out a new revenue growth management (RGM) system eyeing 14 of the top markets in India.
“We are going to roll-out RGM between now and the middle of next year in 25 markets, of which 14 are top markets in India,” he said during the concall. “We are also going to double our placement of incremental coolers, which we found to be correlated with our ability to drive pipeline growth. In many parts of the world, volume (growth) is going to be the principle driver of revenue, especially in emerging markets such as India and we are asking countries to build the franchise,” he said, adding the company would continue investing behind “leader brands” in these markets.
During his first trip to India in August following his elevation as Coca- Cola’s CEO, Quincey, 52, had said he was keen to take the Indian unit, ranked sixth-largest by volume, into the firm’s top-three club in the future. “That is my vision,” he said, adding the immediate mandate for the India management would be to take the company to being the fifthlargest by volume within the CocaCola universe. The global major counts the US, Mexico, China, Brazil and Japan among its top five markets in the world.
The local management, led by T Krishnakumar, president, India and Southwest Asia, are putting the building blocks in place to achieve this, creating a range of juice drinks based on regional and national fruits. This is part of its strategy to become a “total beverages company”, Krishnakumar had said. The recent July-September quarter, for instance, saw Coca-Cola India return to growth on the volume front after a lull over the previous periods. It reported a 6 per cent volume growth in the September quarter coming at a time when the global major saw challenges in larger markets such as Brazil.
Quincey had said when announcing the company’s September quarter results that India growth was driven by solid performance across the portfolio, navigating trade issues emanating from the introduction of the goods and services tax (GST) in July. In the past one year, Coca- Cola India has stepped into categories such as value-added water besides packaged coconut water, milk-based drinks and juices and is expected to beef up this portfolio aggressively as its works on a “fruit circular economy” that endeavours to cover activities from the farm to the bottle. The company is also doubling its juice distribution outlets from 1 million to 2.6 million over the next three years.