Companies

Hindustan Coca-Cola gets its fizz back with sharper focus

Meenakshi Verma AmbwaniNew Delhi, November 13 New Delhi | Updated on November 13, 2019 Published on November 13, 2019

Posts profit of ₹321 crore in 2018-2019 against losses in the previous two fiscals

Sharper focus on profitability, wider distribution of products and bets on premium products by beverage major Coca-Cola have helped the Indian bottling arm, Hindustan Coca-Cola Beverages Pvt Ltd (HCCB) to get back into the black in FY19 after two years.

According to the company’s filing before the Registrar of Companies (RoC), HCCB posted a net profit of ₹321 crore in the fiscal 2018-2019. In comparison, it posted a loss of ₹118 crore in 2017-18 and a loss of ₹233 crore in 2016-2017. Net revenue grew by 10 per cent to ₹9,427 crore in FY19 from ₹ 8,564 crore in FY18.

A few months after Christina Ruggiero took over as the new CEO in October 2017, HCCB had announced restructuring of its operating structure with a sharper focus on “profitable and revenue-led growth”, besides plans to sell a wider range of products across both value and premium segments.

Expansion plans

In line with this strategy, sources said that HCCB has expanded distribution to nearly 10 lakh new outlets in the past 18 months and has shifted its focus to value-based from volume-based propositions. The American beverage major has, for instance, strengthened its value offerings with the launch of smaller packs and sizes across categories including 100 ml tetrapak for Maaza Refresh and 250 ml PET packs for Minute Maid juices.

In 2017, HCCB also decided to set up a premium division to manufacture and distribute higher margin premium products such as ‘smartwater’, Minute Maid Apple Sparkle, Maaza Gold and Thums Up Charged.

Smartwater sales

Coca-Cola last month said that India has now become the fourth largest market for Smartwater in less than two years of its launch. Buoyed by consumer’s positive response, the company is expanding distribution of its premium packaged water brand to about 90,000 outlets.

Replying to a BusinessLine query, a spokesperson for HCCB said, “We are making steady progress in realising our potential, given that we are one of India’s top FMCG companies, a manufacturing organisation of significant scale, and a large employer.”

“Our profitability in 2018-19 was driven by a 10 per cent growth in comparable operating revenue, driven by juice volumes, better product mix, including some new packs and products, especially in the juice segment, gain from one-time exceptional items, favourable commodity prices and better execution,” the spokesperson added.

Published on November 13, 2019
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