Coca-Cola says it plans to boost ad spend and double sales by volume in India over the next five years, even as domestic soft drink brands continue to gain market share.
And the company also says it expects to see strong growth this year, despite the impact of the coronavirus and a slowing Indian economy.
CEO and chairman James Quincey told reporters that India, currently the company’s fifth-largest market by volume, will soon be among the brand’s top three markets.
Quincey added that he did not expect the coronavirus to have any effect on the brand’s supply chain, at least not yet.
“It really hasn’t affected us in the short term,” he said. “Obviously, when we plan, we have a supply chain, we build in buffers and contingencies around key ingredients for our products around the world. So, we still have plenty of safety stock,” he explained.
The company sees sparkling drinks, fruit-based products, and innovation as the three pillars of growth, Quincey said.
President and CEO of Coca-Cola India and South West Asia T. Krishnakumar said, “The next target we are eyeing is to double the size of the business in five years. We had promised to invest $1.7 billion by the year 2023 and we are on path. We will complete our investment ahead of time.”
The announcement comes as sales of regional drinks brands are growing at over twice the rate of market leaders Coca-Cola and Pepsi in India.
When taken in aggregate, brands such as Bovonto, Jayanti Cola, Sosyo, Runner and Kashmira, showed 1.2% growth last year, the Economic Times reported. That compares to 0.5% growth for Coca-Cola, and a fall in sales of 1.2% in 2019 for PepsiCo.
The hundreds of local brands together now account for 24% of the non-alcoholic drinks market by value, almost half of the sales of industry leader Coca-Cola, which accounts for almost 50% of the market, and well ahead of PepsiCo’s 19.6% share.
Meanwhile, Coca-Cola and Pepsi may be planning price rises of between 6% and 14% in India across their range of soft drinks. This would be the first rise for the drinks giants since 2014, the Business Standard noted.
Sourced from Best Media Info, Economic Times, Business Standard; additional content by WARC staff