Slowdown hasn’t affected sales growth: James Quincey, Coca-Cola Chairman

Coca-Cola Co chairman James Quincey said the economic slowdown hadn’t affected growth in India, which remains a “super-attractive market” for the beverages giant.

“We see India as a super-attractive market. We are not overtly concerned about one quarter up or down in India or any other markets in the world. Our experience is, if we stick to our investment plans going into the future, we drive the growth,” said Quincey, 55, who joined Coca-Cola in 1996 and took over as CEO three years ago.

The 128-year-old company has been trying to speed up the development of healthier alternatives as consumers shift from fizzy drinks to low- and no-sugar options and drinks globally.

However, it said the carbonated drinks market continued to expand in India — its fifth-largest market by volume — helped by a host of reasons including smaller pack sizes and low-calorie variants.

In the last calendar year, Coca-Cola sold over a billion unit cases in India and expects to double that in the next five years. The company said India could become its third-largest market but didn’t specify any timeline.

Quincey said protests and riots in parts of India could disrupt consumption growth, but said he is hopeful the strife will be resolved democratically in the country that’s its fifth-largest market by volume.

“If there are disruptions in the functioning of any society, it’s always going to be some degree of a problem for all businesses. I think the scale (of the recent violence) was such that it was. India is a vibrant democracy and all of us hope things get resolved in an appropriately democratic fashion,” Quincey said in reply to ET’s question on the impact of unrest and whether its growth outlook will be revised.

“We see a lot of long-term potential in India and one of the reasons is it’s a democratic country. Every country has arguments about issues and they need to be seen in the process which is available,” Quincey said.

The recent protests and violence over the Citizenship Amendment Act (CAA) come as India’s fast-moving consumer goods (FMCG) market slowed to 6.6% growth in the December quarter from 15.7% a year ago.

The Atlanta-headquartered company, with net revenue of $37.3 billion in 2019, had earlier committed to invest Rs 11,000 crore in India to create an agriculture-focused ecosystem, food-processing units and sourcing that will help it introduce innovative fruit-based products by 2022. The company said it will compete the investment ahead of time. The beverages firm, which also sells Thums Up and Sprite, controls half the market for mango drinks with Maaza.

Two months ago, bottling subsidiary Hindustan Coca-Cola Beverages (HCCB) announced that it was divesting operations in north India to existing bottlers. These generated profit of $73 million, or about Rs 500 crore, according to its latest annual report.

Source:- Economic Times

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