Coke's plan is to have an endless summer
MUMBAI: Coca-Cola is pivoting towards an "all-weather" strategy to get consumers to spend on soft drinks beyond summers - the peak sales season for beverage firms worldwide as companies increasingly contend with the scourge of climate change and vagaries of weather.
"An all-weather mindset is very important. It reduces dependence on seasonality," said Henrique Braun, global chief operating officer and executive VP at The Coca-Cola Company. Implementing an all-weather strategy in India would mean creating more occasions to consume beverages.
Coca-Cola is betting big on festivals to drive more consumption of cold beverages in India. "India is a developing market... there are too many occasions that we need to develop in order for the seasonality to be lower.
It takes time, but that's the game in the long term," Braun said in a media roundtable on Thursday, indicating that the early arrival of monsoons in India this year may impact summer sales. "You might have an impact on a daily basis, weekly basis, but you need to overcome these over time, and that's what the (all-weather) strategy is," Braun said.
The monsoon hit Kerala on May 24, eight days ahead of its normal arrival date on June 1, the earliest onset since 2009.
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Rains have also advanced to other parts of the country, impacting sales of soft drinks, cold beverages, and ice creams. Braun's trip to India, the second executive visit from Coca-Cola's global leadership team this year after CFO John Murphy, comes at a time when the local beverage space has become more competitive after Reliance's Campa entered the market with its cheaper-priced cola variants.
"The barrier to entry is not that big, but the barrier to stay and scale is very high," said Braun, who discussed growth opportunities with the India team and studied the trends shaping up in the market during his visit.
Coca-Cola, which continues to see "resilient" demand in India despite a broader slowdown in consumption over the past few quarters, will offer a wide selection of choices to consumers and build a varied portfolio across pack sizes amid a push towards healthier options among certain sections of the population. "More than two-thirds of our products globally have zero-calorie offerings from the same brands. There's always a product for a consumer need state in a size and serving that they want and the formulations that they can enjoy with the best taste.
That's our approach. Our job is to continue to provide the right portfolio and let choice be the driver," Braun said.
Coca-Cola said it wants to build more billion-dollar brands out of India. Over the years, it has built two homegrown brands, Maaza and Thums Up (which were acquired by the company in the 1990s), into billion-dollar brands and took them global. Sprite (not local) is the other one to have reached that mark in India.
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