Having bucked the slump, Coca-Cola India's growth continues to be robust. Atul Singh, CEO & president of the company, is betting big on the country's potential to emerge as its top five markets in the world. He shared his plans for sustaining the growth with Suvi Dogra.
Will Coke re-assess the growth numbers in the country given the economic scenario? What is your plan of action?
Coca-Cola India posted an 18 per cent rise in net profit last quarter -- the ninth straight quarter of growth -- indicating the scope of the domestic beverages market. We have aggressive plans to invest and grow in the country. We not only have strengthened our organisational capabilities but also have adopted a more focused route-to-market strategy, wherein we are targeting the occasion, brand, pack, price and channel. After identifying an occasion, we give the consumer the choice of brand that suits the event, further we not only have a wider variety of the pack size but also the price point.
The per capita consumption of carbonated soft drinks is still very low. Do you think the consumption levels will increase in the future?
For Coca-Cola India the per capita consumption stands around 8 per cent (8 ounces) against the industry average of 4 per cent. While the Indian consumers are drinking soft drinks, they clearly aren't consuming in proportion to the population as the category is still not accessible to many. The challenge is to provide the right infrastructure such as coolers to trigger the demand. The other issue is that this category as such is an impulse category hence a soft drink may end up competing against a potato chip brand to an ice-cream brand and hence the per capita consumption remains low.
How do you intend to increase your rural penetration in the country given that the per capita consumption of carbonated drinks is still very low?
Currently, we are present in around 1.2 million out of the 5 million FMCG outlets across the country. The scope to grow is immense. We have started out a programme by the name Parivartan, wherein we train shop owners to display and stock products well. The focus is also to inculcate knowledge of best practices and develop traditional retailers with right skills, tools and techniques. We have already trained 6,000 retailers and hope to train around 10,000 by end of this financial year.
How do you address the pricing issue in India?
Volumes have grown despite our moving away from the Rs 5 price point. The question is about how you execute the strategy. Through packaging innovation we have been able to give to our consumers a choice of price points and quantity. We have recently launched Sprite Xpress priced at Rs 15 for an affordable 'on the go' experience and we also introduced a 1.25-litre fridge pack (an industry first) at Rs 35.
There were some issues with your pulpy orange drink Minute Maid supply...Minute Maid was initially bottled at our unit at Chittoor in Andhra Pradesh. In order to consolidate our position in the northern region, we set up another manufacturing facility for the fruit juice line at Nabhipur (Punjab). The capacity came in late and there were issues with setting up the number of lines and hence we couldn't match the supply with demand. The issue has been resolved now.