Companies

We are staying true to our $5-b investment plan: Venkatesh Kini

Vinay Kamath Chennai | Updated on January 20, 2018

bl26_venkatesh kini

Coca-Cola India’s President says the potential of the Indian market is huge





It’s been a long, hot day, and Venkatesh Kini, President, Coca-Cola India and South West Asia, is relaxing with, what else, a glass of chilled Coke. In Chittoor, AP, to visit mango farms that practise intensive farming techniques, Kini expects a big boost in productivity in mango pulp that will go into Coke’s best-selling Maaza. In this exclusive interview, Kini speaks on Coke’s strategy in India to boost consumption and on retail innovations. Excerpts:

Coke had announced a $5-billion investment roadmap in India. How far down the road are you in this plan?

We had announced a $5 billion investment plan in 2012 by 2020; that is on top of the $2 billion invested already in the country.

Since then, we have invested in a number of greenfield plants across the country. We are confident that with the growth and opportunity we are seeing we will stay true to that plan.

The bulk of investments is in manufacturing capacities and assets like coolers and trucks.

We are also innovating on new things: Bottling partner Hindustan Coca Cola has created a splash bar which is a two-litre bottle that placed in a machine serves as a dispensing fountain.

We have placed 30,000 of these in the market. Last month, we launched a new packaging – perhaps a first in the world – that uses a coating on PET that increases the shelf life of the bottle, which today is three months. If we can prevent carbonation, the shelf life will increase from six months to one year.

Where have you created new manufacturing capacities?

Our bottlers are putting greenfield projects in Yadgir, Rohtak, Rajahmundry… in the last three years, six new projects have come up.

Every year we add 10-15 per cent of capacity. In several existing plants we have added new lines as well.

The challenge in India is of increasing the per-capita consumption of beverages and CSDs. How are you doing that?

Consumption of packaged beverage, juices, sparking drinks, CSDs and water in India is very small.

On an average Indians drink less than one packaged beverage a week, less than half of what we see in Pakistan, one-third of that in China and one-tenth of the average in the developed world. The opportunity is huge; even if Indian consumers drink two a week, that itself doubles consumption. The market for packaged beverages is ₹30,000 crore, so you can imagine how big the market can be.

Is the juice category growing faster than CSDs?

Over the last 3-5 years, sparkling drinks and CSDs have grown at similar rates. Beverages are the fastest growing consumer goods.

We have announced double digit growth in the first quarter of this year.

We are fairly optimistic that there is enormous potential for all beverages, including dairy products. We have launched Vio in a few markets.

Apart from the solar fridges you launched what are the other retail innovations that Coke in India has come up with?

We have already put out over 1,000 solar fridges, but they are for regions where there is no electricity. There are many locations where you get electricity for 6-8 hours a day.

Our technical team developed ‘Eutectic’ coolers which contains a padding material that can keep a fridge cool even if power goes off for another eight hours. That is another innovation we brought in and along with our energy-efficient fridges, we can provide a suite of options to retailers. We are exporting the fridges to 44 countries, as they are more efficient and cost-effective.

You had planned a retail academy with ISB, where does that plan stand?

We had partnered with ISB for a retail academy to help develop talent for emerging modern trade, which hasn’t grown for a variety of reasons. That programme is suspended.

We have continued to support traditional retail. We have parivartan buses which train groups of retailers who don’t have a college degree.

We train them in inventory management and other skills and improve their productivity.

Despite closing your Plachimada plant in Kerala, cases are still being filed against Coke. Can you ever achieve full closure?

Our plant has been shut since 2004. We have not received any notice recently.

As far as we are concerned, our stand is clear. It’s for us to receive any notice and decide the way forward.

There is a lot of evidence to support us and it’s been over ten years of research to demonstrate our point of view, but there is obviously a different point of view as well.

Published on June 26, 2016

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