"This is a country which has one of the lowest per capita consumption levels for packaged beverages and this presents us with the challenge of tapping into this opportunity."
Coca-Cola India and South West Asia’s top boss Atul Singh is an unlikely Punjabi, for it’s the city of Kolkata that reminds him of his childhood as his grandfather moved to the city from Punjab.
But the man who was born and brought up in Kolkata, and is an alumnus of St Xavier’s College, has worked across four continents of Asia, Africa, Europe and North America, and spent nearly 15 years at Coca-Cola. Of the 20 years of Coca-Cola’s existence in India, (when it returned to India in 1993 having exited in the late ’70s) Singh, who’s President and CEO, has been part of the beverage major’s team in India for nine years.
He has also spent five-and-a-half years in China where, under his leadership, mainland China operations became one of Coke’s fastest growing markets.
Singh, a self-confessed foodie and movie buff who loves tuning into food shows on telly, met with us over lunch at the Trident, an oasis of calm amid the chaos and concrete of Gurgaon.
It’s a perfect winter afternoon and Singh is waiting for us at a table on a broad verandah running alongside restaurant Cilantro, sipping, what else, some iced diet Coke. The vast expanse of lawn heightens the sense of quietude.
We’re quick to order and while tucking into some salad and sumptuous pasta, Singh tells us that Coca-Cola India has had 26 quarters of growth, 19 of them double-digit, and that the company plans to pump $5 billion in India by 2020, indicating how important the country is for the beverage major.
But in the midst of talking about numbers and the scope for growth of the packaged non-alcoholic beverages market in India, he points out two interesting aspects of the Coca-Cola story in India: exporting talent and building sustainable communities.
“India is slowly becoming a centre of excellence. We have exported 41 managers from here across the Coca-Cola system worldwide. I am using India as a centre of excellence for a lot of different areas while building talent,” says Singh.
Coca-Cola India runs a retail academy in collaboration with the Indian School of Business to train mid-level managers, helping them get acquainted with global practices. Singh says the vision is to have something as big as the IIMs in the space of retail management.
“As the retail chains from the world expand into India, they are going to need talent for the modern trade,” he explains.
While he is keen to contribute to developing talent for the retail industry, he is also as interested in protecting the small retailers’ interest — from the neighbourhood paanwala in a city to the small kirana store in the hinterland.
The company which, he says, has created several lakh jobs indirectly, wants to touch many more lives through programmes focused on sustainable communities. For instance, Coke organises training programmes for the small kirana stores and retailers, educating them about good business practices. Singh believes the big retail chains and the small unorganised retailers can both co-exist.
At a time when there are concerns about India’s growth slowing down, Singh says the company’s optimism on the country’s long-term growth prospects is intact.
“When you look at the long-term view, we are optimistic, given the demographics; urbanisation is expanding, more and more people are becoming young adults and getting added to the workforce, disposable income will grow; our GDP, even if it grows 6-7 per cent, is higher than lots of other markets around the world,” he elaborates. Singh says that “When we look back, when we get there, from 2020, we would have had a good run, because of the demographics, because of the opportunity and the fact that the company is willing to invest in the opportunity.” He points to the huge untapped potential for the company. “We believe the sparkling and the still category both have been growing and have huge growth opportunities. There are sub-categories which will witness growth. What we have to do is to offer choices and prioritise.”
Thirst for packaged beverage
Coke’s CEO also firmly believes that India is set to see a packaged beverage revolution in India. As Indians become more affluent and get more urbanised, there will be more consumption of packaged beverages and less time for fresh juices.
“What might happen is the leapfrog effect, where unlike other countries that saw gradual growth, India might see exponential growth in demand for more choices of beverages. And a lot more players will want to get a piece of this opportunity.” Talking about the rural opportunity, he says what is going to be critical is how these beverages are packaged and priced so that it’s affordable for people of different socio-economic classes.
“I think the growth in the rural area depends on disposable incomes. If the economy does well, there will be growth and expansion, then rural demand will grow faster. The demographics are in our favour and strong growth will have a positive impact in rural areas.”
Even with the growth prospects, the per capita consumption of Coca-Cola beverages in India is among the lowest across the globe, he says. Even neighbours such as Pakistan and Thailand drink more beverages as per the company’s estimates. And the company is working hard on increasing this per capita consumption.
Vitingo, on the go
The company is running a couple of initiatives to build sustainable communities, which are targeted at empowering women retailers, (with solar coolers) farmers as well as small retailers.
It is also now testing a micro-nutrient fortified beverage called Vitingo in the form of sachets, which it is largely distributing in States such as Tamil Nadu and Orissa in collaboration with NGOs, targeted at combating iron deficiency among kids.
“ We are looking to expand its distribution further, Vitingo has seen a good response, we just want to make sure we have a sustainable model and the product is affordable, we do not make money on it, whatever we make, we put back in the project,” says Singh.
Singh is a keen observer of consumers, especially youngsters, and says he loves interactions.
“I like to have networks of people that I interact with. I enjoy travel and sports. That is where the competitive spirit comes in, observing how they manage, how they coach.”
Coke’s CEO prefers to put behind him whatever controversies the beverage industry was embroiled in a few years ago and instead looks at the opportunity ahead.
“This is a country which has one of the lowest per capita consumption levels for packaged beverages and this presents us with the challenge of tapping into this opportunity and making sure that we are the consumer's choice of beverage every day, every time.”
And, he’s unfazed by our parting question: whether it bothers him that arch rival Pepsi has bagged the IPL rights. As he says, Coca-Cola has a long standing association with sports, and cricket in particular.
“We have been partners and sponsors of key tournaments and matches, the last being the India-Pakistan series. As far as IPL goes, we have a partnership with Mumbai Indians and we are happy with that. That said, there are many other strategic opportunities that are available to us, as we move forward to build a robust, round the year, beverage business.”