Coca-Cola plans flavoured milk, tea, coffee foray

Coca-Cola India is planning to foray into producing flavoured milk, ready-to-serve tea and coffee and iced-tea in India as part of its plans to record profits over the next two to four years, CCI president and CEO Alex Von Behr said.

A final decision on the launch of these brands will be in place within the next three months, Behr told newspersons on Friday.

The first new product and brand will be launched next year.

The company is also working towards launching its drinking water brand, Kinley, on a national scale over the next three months. The brand was launched in south India on Thursday.

CCI, Behr said, had recorded a Rs 29-billion turnover in the 1999, representing a 9 per cent growth from the previous year. "We are not making money as yet. But over the next two to three years, we are looking at a positive return on our investments.''

Regarding the new brands, he said the company is studying its existing portfolio, including Minute Maid brand of fruit juices, carbonated energy drinks, other flavoured drinks and even brands from the Cadbury Schweppes stable. In addition, the company is planning forays in the form of iced teas, ready-to-serve tea and coffee brands and even flavoured milks, a first by Coca-Cola.

''We are currently studying all the brands. We might decide against certain brands altogether. A final decision will be in place within three months.''

In addition, as part of its growth plans for India, the company is also contemplating acquiring some local soft drink brands.

However, the company has not initiated the process as yet.

Coca-Cola India, having invested more than $800 million over the past six years, has set up a network of over 50 manufacturing locations, including 11 greenfield plants. With a turnover of Rs 29 billion, CCI is the third-largest FMCG company in India, after Hindustan Lever and ITC. CCI is now looking at an 18 per cent growth in sales in the 2000 calendar year.

The company had recorded an 18 per cent growth in the first half of this year, and expects to maintain the growth rate for the remaining part of the year.

The company, he said, has achieved an export turnover of $65 million in 1999, thereby achieving an export-import ratio of 5-to-1 as against the target of 3-to-1 set by the government.

The company had recently test-marketed its acquired cola brand Thums Up in Singapore, but the light response to products had forced the company to pull it back. The brand, however, is a leader in the home turf, particularly in Bombay.

The company, which currently controls 56 per cent share of the market, is now working towards becoming an all non-alcoholic commercial beverage company in India.

CCI currently has an employee strength of 6,000 heads. It had recently announced a voluntary retirement scheme and trimmed its workforce by 1,100 heads. ''We have the right number of people now and there is no scope for further reorganisation,''

''We have actually invested $800 million in India, but when we evaluated the operations, the current value came to $400 million. So we decided to write down the actual value of our operations in India," he said, adding that the exercise would not have any major bearing on the company's balance sheet or bottomline.

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