Beverage major Coca-Cola has consolidated its bottling business in India with its in-house bottling arm Hindustan Coca-Cola Beverages Pvt Ltd (HCCB) exiting from the northern region.
HCCB, the company-owned bottler of Coca-Cola, on Wednesday said it is divesting bottling operations in four territories in north of India to existing bottling partners of the company. The company, however, will continue to operate in east, west and south of India.
"The change involves four non-contiguous territories in which HCCB currently operates and is designed to build regional scale, stimulate investments and growth in the northern part of the country. HCCB will continue to operate in east, west and south of India," Coca-Cola said in a statement.
The Atlanta-headquartered beverage major, that sells popular beverage brands such as Minute Maid, Thums-Up, and Sprite, is hiving-off its bottling operations to focus on building a stronger and more sustainable local business in India.
"This move will deliver sustainable growth and will create shared value for bottlers, customers, consumers and communities. This realignment optimises existing capacities, supply chain, brings further investments and improves distribution routes through contiguous territories," it added.
The company, however, did not disclose the names of states where it has divested its business in. Currently, Coca-Cola has over 55 bottling plants across the country, while its bottling network comprises 14 bottlers, including HCCB.
Last year, rival PepsiCo India sold off its bottling operations in the South and West of India to its bottling partner, RJ Corp. Both the beverages majors, Pepsi and Coke, have been increasingly hiving off the bottling side of their respective business to franchise bottlers across the globe. According to industry expert, the key reason for divesting bottling operations is to consolidate the balance sheet of the companies and increase profitability.
In November, Coca-Cola launched fruit juice brand Rani Float in India in line with the beverage company's plans to chase a shift in consumer preferences. Launched in 1982 by Saudi Arabia-based Aujan Industries, Rani Float formed a joint venture, Rani Refreshments, with Coca-Cola in 2011.
Edited by Chitranjan Kumar with PTI inputs