‘Innovative ways to reach the consumer along with affordability will be important to drive the demand’

Meenakshi Verma Ambwani New Delhi | Updated on June 21, 2020

As the country grapples with the pandemic, Coca-Cola said its strategic focus on building a long-term presence in India is intact. In an interview, T Krishnakumar, President, Coca-Cola India and South-West Asia, told BusinessLine that consumers are seeking trusted brands as they go through this difficult period and rural demand has the potential to bounce back faster. Excerpts:

Have all the company-owned and franchise-owned plants resumed operations ?

Almost all our plants have resumed production under stringent safety protocols prescribed by governments and are in conformity to our global standards. As a responsible beverage company, we are conscious of our responsibility to cater to the hydration needs of our consumers. At the same time, we see our people, as our most important asset and will do everything to keep them safe, healthy and motivated. Our strategic investment of building long-term presence in India is intact.

How has the company been managing distribution and production challenges during the pandemic?

We continue to evolve our business models to the changing scenario, while staying close to our bottling partners, customers and suppliers. To ensure our products’ availability, we maintain business continuity plans to look at the entire value chain including supply chain, distribution and inventory management. Amongst the upper urban consumer, there is a strong movement towards newer platforms for purchase like e-commerce and an increased interaction with newer products, while for people in the bottom of the pyramid, affordable solutions are being sought. Hence, innovative ways to reach the consumer along with affordability will be important to drive demand. This increases the role that Coca-Cola needs to play in the consumer’s life, by adapting itself to the changing behaviours towards the ‘new normal’ and using the merits of its agility, range of product offerings and its core strategy of simplicity and focus on the evolving consumer needs.

How are you leveraging on the rising in-home consumption trend?

The Indian consumers are going through a myriad set of emotions — elated with the time they are getting to spend with their family but equally, increasingly anxious and uncertain about their jobs and health. With consumers very positive about the time spent with family, ‘at home consumption’ continues to be the key occasion for beverages. Drinking occasions of ‘while watching TV’ and ‘accompaniment with a meal’ are strong for the sparkling category. ‘Away from home’ is already showing signs of revival and trending back over the weeks.

What are the other key consumption trends that you are witnessing?

While consumers are conscious of what they are buying and dependent on what is available, there is a strong trend to purchase trusted brands. Coca-Cola’s heritage and its relationship with the consumer over the years has helped us continue to be a part of the consumer’s basket even during this pandemic.

There is also a changing channel choice witnessed in consumer behaviour. Grocers, who have been the lifeline during the lockdown, are likely to continue to be a stronger channel along with the newly emerging chemists who are unaffected by the lockdown.

With growing focus on health, is the company fast-tracking any new launches? Given the business disruption, are you also re-looking at your overall portfolio?

We remain committed to our four strategic pillars of growing the core, providing local/ hyper-local beverages to our consumers, developing our Indian brands to go global and creating a platform that interacts with socio-economic engines of India. We have introduced ‘Spiced Buttermilk’, a refreshing offering under the dairy beverage brand — VIO and this has found increased demand in 2020. Made from curd, VIO Spiced Buttermilk offers pure goodness of the traditional home-made chhaas with a spicy twist. As the situation evolves, we will flex our business models to adapt to the new normal to deliver long-term shared value in India.

What is your outlook for rural demand?

With the reverse migration to rural regions, better agricultural income and government support, rural demand can potentially bounce back faster.

What is your view on growth forecast for the FMCG sector?

What we are hoping and working for is what we have learnt historically, in our 134 years of history, we have witnessed it all, be it health-related, military conflicts or economic crisis, we have always come out of that stronger. In the short term, we witness early signs of recovery in countries where the Covid-19 status is more stable and on the decline. We firmly believe that India, as a market, has phenomenal business potential over the long term.

Published on June 22, 2020

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