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Continuing to face growth pangs, beverages major Coca-Cola has witnessed a decline in volume sales in India in the first quarter.
While the company did not give out specifics, it said it had witnessed a low single-digit decline in unit case volume growth in India and South West Asia in the January-March period. Unit case volume means the number of unit cases (or unit case equivalents) of beverages directly or indirectly sold by the company and its bottling partners.
Talking about its performance in the Asia-Pacific region, Coca-Cola said: “Unit case volume growth of 1 per cent included low single-digit growth in our Greater China and Korea and ASEAN business units, partially offset by a low single-digit decline in our India & South West Asia business unit.”
In comparison, the company had reported a double-digit growth in volume sales in its India and South West Asia business unit in the first quarter of 2016.
As the effect of demonetisation in India are in the process of wearing off, soft drink companies continue to face an uphill task with factors, such as slowdown in rural demand in the past, increasing competition and urban homes switching to healthier beverages, adversely impacting their growth trajectory.
In addition, these companies also saw sales disruption in this quarter in Tamil Nadu, due to the trade associations’ call to boycott international cola brands.
Coca-Cola India has been rapidly expanding its portfolio in the country with a slew of launches in the past two years, including entering segments such as dairy and coconut water. Non-carbonated beverages now constitute 35-40 per cent of its overall India portfolio.
In an earlier interview to BusinessLine , Venkatesh Kini, President, Coca-Cola India and South West Asia, had said that he was cautiously optimistic about rural demand. Talking about the company’s global commitments to cut down on sugar levels in its beverages, he had said that the company aims to grow is revenues at a faster rate than the calories in its product portfolio.
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