Coca-Cola India bottling partners investing $1 bn to ramp up capacity

Coca-Cola India, that operates the country’s largest beverages business, is aggressively ramping up its capacity and market reach post-COVID. After the initial hit from lockdowns in 2020 and 2021 due its higher dependence on out-of-home consumption, the maker of Thums Up and Maaza, is preparing to reach a larger consumer base with new line up of products, a top executive said.

According to Sanket Ray, President, Coca-Cola India and South West Asia, its bottling partners are investing $1 billion (Rs 8,000 crore) over two years to expand their production capacity. While, Coca-Cola India owns the formulations and spearheads the company’s marketing campaigns, it has a set of bottling partners, who bottle and sale the fizzy drinks across the country. Ray says, its bottlers, including Coke’s in-house bottling company Hindustan Coca-Cola Beverages, are adding up to 15 new assembly lines that will increase its overall supply by 34 per cent.

The need for rapid expansion in supply of its colas and fruit based drinks is necessary as the company is now eyeing uncharted territories, especially in rural markets. “Over the last one year, we have grown our retail reach by one million outlets. It now stands at 4 million. We are also growing supply of refrigerators to the retailers. This year alone, we have placed 200,000 new refrigerators”, he said.

Citing market analyst data, Ray said that Coca-Cola’s reach at Indian homes have grown significantly since January. Currently, its products reaches about 32 per cent of the homes - seven per cent higher than end-2021. Coca-Cola’s aggressive push for in-home consumption is not without rationale. In spite of it coming up with fridge size and larger as well as cheaper packs - suitable for storing its colas at homes - the share of in-home consumption in its portfolio remains at 35 per cent, while the rest comes from OOH consumption. Globally, in other major markets, the share is skewed more towards in-home consumption. 

Sugar or No Sugar?

To address the growing trend of consumers shifting towards lower calorie drinks, Ray says, Coca-Cola is now gearing up to launch low and zero sugar variants under all its flagship brands like Thums Up, Sprite, Fanta, Limca and Maaza within next 6-12 months. “Soon, every brand will have ‘low sugar’ and ‘zero sugar’ variants. 

In a bid to tap new markets, Coke is also launching a energising drink named ‘Charged’ under its top selling Thums Up brand. And is looking to leverage brands like Maaza and Limca though their positioning as fruit based and refreshing drinks, respectively.