Atul Singh has taken over as the Deputy President, Pacific Group at the Coca-Cola Company at a crucial time. The Atlanta-based beverages maker is facing serious headwinds globally in terms of weakening economy, bad weather conditions and unrests in some geographies, which has impacted its sales numbers. Singh now has the challenging task of growing big markets such as India and China. In his first interaction after being elevated to the new role, Singh talks to Business Line on his agenda.

Do you see similarities between Indian and Chinese market?

There are tremendous growth opportunities in both these countries. Both are large and complex countries, the per capita consumption is relatively small and is below the global average in both these countries. So a lot of the work that has to be done is similar. That would mean a lot of synergies, opportunity for sharing best practices as well as innovation. China is a low cost manufacturing hub for cold drink equipment, while India is knows for its R&D, product testing and equipment testing. Talent can be tapped in both India and China. The second key factor is the demographics. Both these countries have young population and are growing economies despite a slowdown. With growing urbanisation in these countries, people get more affluent and there is an opportunity for our products.

India and China contribute 10 per cent to Coca-Cola’s global volumes. How do you see this changing?

We need to capture this opportunity as there is latent demand with millions moving to the working class. A look at the per capita consumption (number of bottles, roughly the size of 200-ml, consumed per year per person) indicates that both India and China are in the low double digits. India is at 14 and China at 39- compared to the global average of 94, so there is a lot of headroom to grow.

How do you plan to grow the per capita consumption in India?

In the last 6-8 years, we have seen 28 consecutive quarters of growth, even though the last quarter growth was marginal. That is because of early monsoons. So we have grown the per capita consumption over time. In India we started late and in our business it is all about making your product available, making it ice cold, putting coolers in the marketplace, getting infrastructure in the rural areas. So transportation has been an issue in the rural areas versus some other countries where there are no such problems. Horizontal expansion has been, traditionally, a lot slower in India given the infrastructure challenges. Hopefully this is going to change. People in India will want more and more packaged drinks as they become more affluent and have less time to prepare things from the scratch. With that evolution comes opportunity for more products and higher consumption.

So you believe this is just one of the quarters and not a big concern?

Last year monsoons were late, and we had an extended summer and we had over 20 per cent growth in the same quarter last year. This quarter monsoons came in early and we lost that consumption. Early monsoons are good for the country and give a boost to the economy. I am not worried because the fundamentals are strong.

What is the big picture vision in the new role? What are the targets you have set?

The big picture for me is to capture growth, build capability, make sure we are the best organisation, have world class system and be aligned with my bottlers for growth. It’s about making sure we have world class talent and world class marketing. Coca Cola is known for its marketing. Our targets are to capture the growth opportunities and empower our teams to drive the business forward. I believe sparkling beverage, juices and water will be the core areas that will drive the growth.

How key a role will pricing play for increasing the per capita consumption?

Depending on the channel evolution, and the priorities of horizontal growth and our abilities to reach out to more and more categories, we put different kinds of products at different price points. Earlier people use to take a crate of glass bottles home, but now you carry the PET bottle. In the rural market affordability is an issue, we want to give the price point of Rs 10 to our consumer, because that is the affordable price point and that is an opportunity for us.

How did the Rs 8 price point for Coca-Cola work this summer? Was it done to make Coca-Cola your largest brand compared to Sprite or Thums Up?

The Rs 8 invitational price did well and the brand clocked a growth of 18 per cent last quarter. All our brands are great and it does not matter which one is number one. The reason for pricing Coca-Cola at an invitation price of Rs 8 was because we had not really launched the brand in many parts of the country. It is almost like a sampling programme. Coke had never been launched in 60-70 per cent of the country; it was only launched in PET through in the super market channel at shopping malls and other such places. The availability was just not there since we never drove it in the market.

Are your investments of $5 billion on track in India? What about China?

That is on track in the form of expanding our cold drink bottling lines, cold drink equipment, transportation assets, cold chains, market assets, new product innovation. Our programmes are on track. It takes time to build to get land, add lines, and build a factory. We have announced investment of $ 4 billion over the next 3-4 years and that will happen in China. We will invest behind the opportunities. As part of our vision 2020, we will continue to invest.

Since growth in your traditional markets like the US is down, does this raise the bar for the India-Greater China region?

The bar for the BRIC countries and the Sub-Saharan region has always been high because of per capita consumption is lower than average. But there are countries such as Mexico for which the per capita consumption is very high. So I am saying let’s get the per capita consumption to 100. There are parts in India which may have a 100 per capita consumption, and I am sure there are parts in China too.

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