The Hindu Business Line : ‘Lot of opportunity in packaged products’

Venkatesh Kini, VP (Marketing), Coca-Cola India, says packaged drinks account for only four per cent of the total beverages market, opening up good prospects..

Venkatesh Kini with actor Hrithik Roshan at the launch of the Fridge Pack last year

Meera Mohanty

These are happy times for Coca-Cola India. With 10 consecutive quarters of growth, the Indian market at least seems to be unfazed by the recession. A consistent focus across brands and engaging campaigns with stars such as Akshay Kumar, Aamir Khan and Hrithik Roshan has helped the beverages company strengthen its brands. It claims leadership positions in the cola (Thums Up), clear lime (Limca), juice drink (Maaza) and packaged drinking water (Kinley) retail segments today. It is reportedly readying to launch a lemonade and energy drink this year. Venkatesh Kini, Vice-President (Marketing), Coca-Cola India, shares the ‘Coke side’ of the business.

Is the empty café (in the advertisement for the Open Happiness campaign) a reference or an acknowledgement of the slowing market?

No, the empty restaurant is not so much about the recession or downturn as it is about people today being too busy for real human interactions. The idea is similar to the international film Avatar which shows everyone plugged into iPods, laptops or Blackberrys in a virtual world with no real interactions. In this virtual or digital world, one guy picks up his phone and makes a human connection.

Isn’t the recession also a reality for the FMCG sector? Do you foresee slower growth rates?

Internationally maybe yes, but not in India. The last quarter has been good. We are growing steadily and the best thing is that all our brands in all categories are growing.

Each brand accounts for at least 10 per cent or more of our product mix, so if any one brand doesn’t deliver we can’t grow at 28 per cent. (Coca-Cola India reported 28 per cent volume growth during the fourth-quarter ending December 31, while internationally unit case volume grew only 4 per cent and profits fell 18 per cent.)

What’s the plan for this summer?

We have just kicked off our summer season with the Open Happiness campaign. The message of this campaign, launched recently in India, is that happiness grows when you can share in simple joys, whether it is in watching cricket together or just sharing two minutes with someone at a café.

Besides this, we have a year-round marketing calendar, with our brands having a presence round the year.

In September, for example, we actively carried through Thums Up ads following Akshay Kumar’s car crash commercial. Then we carried out the Chandni Chowk to China promotions in January. In October, we launched the Sprite 350 ml bottle and Fanta Apple in the southern markets.

There is a trend towards more equal consumption throughout the year. Summers no longer account for the bulk of the business. Our fourth-quarter sales growth was at 28 per cent, which is faster than the average growth for the year. We launched our summer campaign in February, which is a month earlier than what we did last year.

What kind of investments are you making this year and in which areas?

We don’t comment on specific investments and spends. But our plans for the $250-million investments over the next three-four years, announced in December 2007, are on track. This will go into new plants, trucks and coolers. With regards to advertising, we have signed up with the Delhi Daredevils and the Kolkata Knight Riders (KKR) and renewed our contracts with our brand ambassadors Aamir, Akshay, Vijay, Ganesh and now Gautam Gambhir. (The cricketer is the hero of the Open Happiness campaign.)

Will you be launching the lemonade, the energy drink, anytime soon or flavoured water, maybe?

You don’t have to wait for new products. We have also done a lot of launches in new packs in the last two years: pocket Maaza, Minute Maid is now available in 450ml, 250ml and a carton. In the last 12 months we have launched four new packaged products and rolled out Fanta Apple nationally.

There is a lot of opportunity there, considering that packaged drinks only account for four per cent of the total market for beverages in India. Under our OBPPC (right opportunity, for right brand at the right price, package and through the appropriate channel) programme, we are looking to grow the market and expand the consumer base. Our launch of the ‘fridge pack’ is a good example. It filled a real gap and is doing very well, crossing the 5-million mark within months of its launch.

What is the plan for the IPL? How many teams will you be associated with?

Over the last two-and-a-half years we have consistently maintained our connect with cricket, both on national and international series, as on-ground partners and using the mass media vehicle. Cricket remains a passion with Indian audiences and that’s why we have also tied up with the Delhi Daredevils, and the Kolkata Knight Riders.

Will you be extending the relation to Shah Rukh Khan?

It’s too premature. We are looking to use the local connect of the teams with below-the-line activities. In Delhi it will be for Sprite, and we are still working out the details of what we can do with KKR in Kolkata.

Are you shifting media spends from above the line to below the line?

We are continuing with our media spends. But from the earlier TV-centric focus, we have diversified our marketing investments across multiple media, with a lot more of outdoor, radio, print and in-store activities. We are also using non-traditional media like the Internet. We did a unique advertisement on the Delhi Metro tube walls and released a full music video version of our Limca campaign.

On the distribution front?

We are also working with our sales developers and executives to enhance purchase experience at the retail end. Through our ‘Parivartan’ programme we have now worked with more than 10,000 traditional retailers.

The small shop owner in India, I must say, operates with far more complexity. He isn’t always given credit for the amazing job he does with such little resources. He manages to do a lot in the little space he has, all his investments, margins, cash flows and retailing ideas are worked out not on fancy worksheets on laptops but in his head.

Related Stories:
Coca-Cola posts 28% rise in unit case volumes in India
Coca-Cola appoints new V-P Strategy

More Stories on : Interview | Strategy | Beverages

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