Companies

Coca-Cola initiates ‘voluntary separation’ programme in India

Meenakshi Verma Ambwani New Delhi | Updated on October 07, 2020 Published on October 07, 2020

To phase out coconut water brand Zico globally

Beverage major Coca-Cola has initiated a ‘voluntary separation’ programme for its employees in India, as part of its global restructuring plan. The programme — which was initially offered to eligible employees in markets such as the US, Canada and Puerto Rico — is now being expanded it to other markets.

The beverage major is also globally phasing out its packaged coconut water brand Zico, which was being test-marketed in India.

According to sources, the company has started the ‘voluntary separation’ programme for employees in India from October 5 and eligible employees can avail themselves of the option till October 15. Only employees who joined the company on or before September 1, 2017, can opt for the programme. Coca-Cola India is said to have about 200 employees on its rolls.

The voluntary separation programme has not been offered to employees of the company’s bottling arm, Hindustan Coca-Cola Beverages Ltd, in line with the global strategy.

Re-organisation

In August, the beverage major had announced its strategic global re-organisation exercise, under which it decided to merge 17 business units to set up nine new operating units. When contacted, Coca-Cola India referred to the statement that the company had issued globally.

According to the company’s global statement, the voluntary separation programme has been announced in order to minimise the impact of the structural changes and will “give employees the option of taking a separation package if eligible.” “The voluntary programme is expected to reduce the number of involuntary separations,” the company’s global statement added.

The beverage major also said its structural changes will result in the reallocation of some people and resources, which will include voluntary and involuntary reductions in employees.

Zico

Earlier this week, Coca-Cola also announced its plans to phase out its coconut water brand Zico globally in the coming months, as part of its “portfolio optimisation efforts.”

“The rightsizing of the portfolio is an acceleration of the strategy we have been pursuing for the past several years, which focusses on building brands that prioritise scale in an effort to accelerate growth,” the company said in a statement.

In India, the beverage major had been test-marketing the packaged coconut water brand in select markets, as part of its strategy to strengthen its presence in the ethnic beverages segment. It had been importing Zico from Thailand and had earlier stated plans to scale it up after gauging consumer response.

Covid impact

Beverage companies in the country have been severely impacted due to muted out-of-home channel sales due to the pandemic outbreak. In addition, the Covid-induced national lockdown coincided with the key summer season, which contributes a significant chunk to beverage companies’ annual revenues.

Over the past few years, Coca-Cola India has been strategically focussing on building its presence in the ethnic beverage segment. For instance, it has been in the process of scaling up its jeera-flavoured sparkling drink brand RimZim and had launched packaged spiced buttermilk under brand Vio in June.

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Published on October 07, 2020
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