The Hindu Business Line : Coke develops India as `centre of expertise' for tea, coffee biz

IN line with its increasing focus on the non-carbonated soft drink business in India, Coke India has established a Centre of Expertise for hot tea and coffee vending. And to carry forward its success in this product segment, it has been asked to provide the entire business model used here to several other Coke operations across the world.This could mean revenues could accrue to Coke through some kind of a royalty payment arrangement."We have developed India as a centre of expertise for the hot beverage business and provided this model to other Coke operations such as South Africa, Bahrain and Egypt. We do not know the revenue model as yet for providing this expertise but this could well be payment of a certain royalty. These modalities are still not clear," the Coke India Vice-President, Mr Sunil Gupta, told Business Line.

Also, the company has decided to extend this business to outlets other than McDonald's even as it today announced the launch of Georgia Gold ice tea and cold coffee under the same distribution model.

At present, Coke's tea and coffee business comprises Georgia Gold hot and cold options being sold through Mcdonald's and the hot beverage vending business which gives regular tea and coffee and is present in Delhi, Kolkata, Hyderabad, Punjab and Mumbai.

Meanwhile, McDonald's India today announced the rollout of Georgia Gold ice tea and cold coffee across all its outlets in Delhi and Mumbai. This follows considerable business growth after McDonald's introduced hot tea and coffee under the same brand name in 2002.The latest cold beverage line has been specially created by Coke for McDonald's and is part of a strategic partnership between the two companies for beverages, McDonald's North India Managing Director, Mr Vikram Bakshi, said here today, adding that this is the first time ice tea and cold coffee vending solutions have been developed by Coke for McDonald's across the system worldwide.

The equipment has been developed by Coke's research and development wing, keeping in mind the McDonald's service standards and transactional needs and enable the dispensation of these products within 25 seconds, Mr Bakshi added.

The Coke India President, Mr Sanjeev Gupta, said his company took less than a year to execute the ice tea, cold coffee business and that the product formulation for it had been developed by the company's R&D team in Bangalore.