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In line with its global strategy to tap into emerging opportunities, Coca-Cola has begun pilot testing alcoholic ready-to-drink beverages in India.
“Coca-Cola is pilot testing select brands like Lemon-Dou from its global portfolio of low-alcoholic, ready-to-drink beverages in a few States in India. The preparation and distribution of these beverages are done separately in dedicated and independent facilities in India which are different from the facilities that prepare and distribute its non-alcoholic ready-to-drink (NARTD) beverages,” the company said in a statement. For the test launch, Lemon-Dou has been launched at ₹230 for a 240-ml can in some States.
The beverage major had first launched Lemon-Dou in 2018 in Japan, which marked its entry in the alcohol beverage market since the late-1970s (when Coca-Cola owned a winemaker in California).
Abneesh Roy, Executive Director, Nuvama Institutional Equities, said, “In our view, this is an interesting move and could expand the ready-to-drink alcoholic beverage market. Having said that, there are many restrictions in alcoholic beverage and distribution is also different. With alcohol being a complex distribution and manufacturing business in India, Coca-Cola is expected to seed the product in the market only gradually. Besides, spirits is a highly regulated and heavily-taxed sector in India, with pricing controlled by individual States.
The beverage major has in the past said that its foray in categories such as alcohol and coffee is part of its strategy to grow its total addressable market. In terms of its global portfolio, Coca-Cola has a presence in three segments of flavoured alchohol ready-to-drink beverages. It defines them as hard seltzers, hard alternatives including Lemon-Dou and Simply Spiked Lemonade and pre-mixed cocktails. In October, the company had launched Jack Daniel’s & Coca-Cola in the US.
5th largest market
India is the fifth largest market for the beverage major globally. In Q3, Coca-Cola had said that that its India business witnessed double-digit volume and topline growth in the third quarter, leading to an increase in its value share in the market.
Earlier this month at a investor meet, Coca-Cola’s management had stated, “India is one of the bright spots that we have and continues to have accelerated growth. We are paying a lot of attention to the quality of growth rather than just the growth in the market. It’s important to build market that’s developing with potential to be a lot bigger in the future, with the right foundation capability in place.”
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