Coke takes long term view in India

06 April 2012

NEW DELHI: Coca-Cola, the soft drinks giant, is aiming to "recruit new consumers" as a means of driving growth in India, a strategy which could prove effective for an estimated two decades or so.

The company is investing $2bn in India over a five year period, as it seeks to tap rapidly-rising demand, whether that be for carbonated, sports and energy drinks, or for juices and flavoured water.

"I think commercial beverages are going to explode. People will want to buy beverage than prepare it on their own, and all segments will grow," Sumanta Datta, VP, customer and commercial leadership, at Coca Cola India, told DNA India.

More specifically, Datta reported the average person should drink two litres of liquid per day, but the typical Indian customer consumes between two and three litres of Coca-Cola products in a year.

"Imagine the scope for development. It will also lead to rise in new categories," Datta said. "In India, the journey for most categories has just started."

Currently, India ranks among Coca-Cola's top ten global markets, and the US multinational is attempting to build on this progress by enhancing its distribution network and customer base.

"The focus on growing the category with modern retail and expanding the category base, and recruiting the consumers is something we are doing every single day," Datta said.

In achieving this goal, it is offering an entry-level 200ml glass bottle of Coca-Cola at a promotional price of just Rs8, although the discount-free cost is still just Rs10.

"To maintain a price point of Rs10 is a challenge. But that is also something we believe in," said Datta. "In the next five-to-ten years, we might have to innovate further to maintain the price point."

Among the innovations Coca-Cola has rolled out to date are solar-powered coolers in numerous rural markets, alongside adapting packaging and pricepoints in different regions across India.

"We are going to continue to recruit new consumers for the next 20 years at least," said Datta.

PepsiCo is already selling products costing just Rs5 to reach India's poorest shoppers, something Coca-Cola is considering. "We continue to evaluate," said Datta. "We have a few products there, but those are more for the social causes we are working on."

Data sourced from DNA India; additional content by Warc staff