Coca-Cola aims to double India business, will spend more on advertising

James Quincey, CEO, Coca-Cola, said the corona virus crisis would have a very limited impact on the company. On the recent clashes in Delhi and anti-CAA protests, he said disruptions in the functioning of society will always cause some degree of problems

Akanksha Nagar
New Update
Coca-Cola aims to double India business, will spend more on advertising

As India becomes the fifth largest market by volume for The Coca-Cola Company on the back of an impressive 1-billion-unit case sale last year, the soft drink major plans to double the size of its business in the next five years and also increase its marketing budget.

“This year, we will certainly increase our marketing budget in line with the growth in our business and new products," said James Quincey, CEO, Coca-Cola.

Talking to, Quincey said innovation has become a bigger part of what the company does and there's been a greater focus on bringing new variants of existing brands and new products to the marketplace. 

He said India presents a promising opportunity and is a super attractive market to grow the business and is likely to become one of the top three markets for the company soon.

Sparkling beverages, fruit-based products and innovation are the three pillars the company has identified as drivers of growth.

Coca-Cola had earlier committed an investment of $1.7 billion by 2023 to grow what it calls the fruit circular economy in India.

As a part of this, it wants to invest in the entire fruits supply chain—right from working with farmers to grow high-quality fruits to processing them for fruit-based drinks and creating a line for finished products to be marketed in India.

As a part of growing volumes in India, Coca-Cola will also launch new products across categories, including enhanced hydration, nutritious dilutables and beverage-plus (like fruit-based snacks).

T. Krishnakumar, President and CEO of Coca-Cola India and South West Asia, said, “The next target we are eyeing is to double the size of the business in five years. We had promised to invest Rs 11,000 crore/ $1.7 billion by the year 2023 and we are on path. We will complete our investment ahead of time.”

For the last two years, the portfolio of beverage offerings has expanded in a segmented manner.

The company has focused on listening to the consumers and is offering beverages to match their evolving preferences and going hyper-local. It is also in the process of transforming itself into a ‘total beverage company with strong local roots.’

“As our business is really so local in terms of manufacturing production, that’s where we are investing. So, it is about how we adapt the business in each country to the local circumstances and the best decisions for that marketplace,” he said.

Coca-Cola India has also optimised manufacturing and distribution networks to find the best ways to regionalise its business and create more opportunities for its local bottling partners.

Talking about the economic slowdown, Quincey said, “We are not always really concerned about one floor up or down in India or anywhere else.  We're focused on continuing to invest for long-term goals. Last year, we've seen good demand, and will see 2020 as another good year, building on the success of 2019. So, the consumer demand is there."

Asked about the ongoing anti-CAA protests and recent unrest in some areas of Delhi, he said, "If there are disruptions in the functioning of society, it's always going to be some degree of a problem. We hope things get resolved in a properly democratic way as there is a lot of long-term potential in India and one of the reasons is the country being democratic.”

On the impact of coronavirus on the company’s global operations, Quincey said that Coca-Cola was insulated from any short-term impact since it has buffers and contingency plans for such situations and has plenty of safety stock for its products.

“If the coronavirus becomes a global epidemic at exponential proportions that would be a different case. Due to the practice of regionally dispersed manufacturing and close to the end-market that Coca-Cola follows, there was an inherent resilience in its business model,” he added.

Krishnakumar said that reducing sugar content in the beverages is one of the top priorities for the company in the country.

He said, “We want to bring down sugar content of our offerings across categories to below 6 gm over the next three to four years and have already begun working on this. We have been expanding our product portfolio and most of these products come with sugar level which is much below as stated with WHO. Every year, we are bringing the level down on an average across beverages. In the last 10 months, we are reducing sugar content across brands such as Thumbs Up and Maaza. New products are being formulated with low sugar.”

Coca Cola