Early rains disrupt Coca-Cola’s peak season performance in India

New Delhi: Beverage behemoth The Coca-Cola Company reported a decline in sales volume in India during the June quarter, impacted by early monsoons and geopolitical tensions.

Despite the drop in volume in the second quarter, which ended June 27, Coca-Cola remains “bullish on India” and is “pretty confident,” said James Quincey, Chairman and CEO of The Coca-Cola Company, during an investors' call.

The company had a strong start to the June quarter, which is the peak season for beverage sales, but early monsoon rains impacted performance, Quincey noted.

“In India, after a strong start to the year, volume declined as our business was impacted by early monsoons and geopolitical conflict early in the important summer season,” he said.

In response, Coca-Cola is now developing more granular, channel- and customer-specific execution strategies, driving more tailored promotions, and accelerating the placement of coolers.

The cola major is also “engaging consumers with integrated marketing campaigns like Coca-Cola Meals supported by execution in QSR channels, Thumbs Up with Biryani, Sprite with spicy meals, and Maaza with festivals, and tailoring these activations to regional and local needs,” Quincey said.

In addition, its system is expanding its customer base in India and recently surpassed one million customers on its digital ordering platforms, he added.

Responding to a query about the outlook for the Indian market, Quincey said, “In the case of India, it's never going to be a straight line, and indeed Q2 was not. But we are very bullish on India overall. We have a lot of marketing campaigns focused on India.”

Commenting on the company’s deal with Jubilant Bhartia Group, in which it divested a 40% stake in its bottling arm Hindustan Coca-Cola Holdings (HCCH), Quincey said the partnership will “bring some new energy, dynamism, focus, and proactivity to the execution in the marketplace.”

“So we think we’ve got a strong plan from a marketing and innovation point of view. With some re-energised focus on this transition bottler, we are pretty confident about where we’re heading in India,” he said.

India is the fifth-largest market for The Coca-Cola Company.

Overall, Coca-Cola’s unit case volume declined by 1%, as growth in Central Asia, Argentina, and China was more than offset by declines in Mexico, India, and Thailand.

Unit case volume refers to the number of unit cases of beverages directly or indirectly sold by the company and its bottling partners to customers.

In the Asia Pacific region, which includes India, unit case volume declined by 5%, largely due to the decline in India and the impact of refranchising bottling operations. The Atlanta-headquartered company reported a 1% increase in its net revenue, reaching USD 12.5 billion.