Companies

We will explore opportunities, business models that create value locally: Coca-Cola India chief

Meenakshi Verma Ambwani New Delhi | Updated on March 22, 2021

Sanket Ray, President, Coca-Cola India & South West Asia

‘There is improvement in consumer sentiment and consumption’

Sanket Ray, President, Coca-Cola India & South West Asia, took over his new position, at a time when the beverage major has been undergoing global restructuring. In an e-mailed interview with BusinessLine, Ray said to capture India’s long-term growth potential, the company will require new investments, new capabilities and new business models, supported by an ecosystem of new local partnerships.Excerpts:

What are the key goals of the company’s global restructuring exercise and what will this mean for Coca-Cola India's future?

The Coca-Cola Company is building a networked global organisation, combining the power of scale with the deep knowledge required to win locally. We have created new operating units focused on regional and local execution that will work closely with five marketing category leadership teams that span the globe to rapidly scale ideas. This structure will be supported by the company’s newly created Platform Services organisation, which will provide global services and enhanced expertise across a range of critical capabilities.

Our vision at the new Coca-Cola India is to craft the brands and choice of drinks that people love. And done in ways that create a more sustainable business and better shared future that makes a difference in people’s lives, communities and our planet.

We firmly believe that India as a market has phenomenal business potential. Our strategic investment of building long-term presence in India is intact. To capture this growth potential, our journey forward will require new investments, new capabilities and new business models, all supported by an ecosystem of new local partnerships. We will continue to explore new opportunities and new business models that create value locally in-line with our endeavour to be a locally relevant, consumer centric company. We are committed to deliver sustainable growth and create shared value for our local partners, customers, consumers and communities alike.

Coca-Cola had divested its company-owned bottling operations in the northern region to franchise partners in 2019. Given the disruptions of the pandemic and pressures of asset-heavy bottling operations, will you look at exiting bottling operations in India or divesting bottling operations in other regions?

We are on course to building a stronger and more sustainable local business. The re-alignment of bottling operations in the northern region was designed to build regional scale, stimulate investments and growth in the northern part of the country. This realignment optimised existing capacities, supply chain, brings further investments and improves distribution routes through contiguous territories. We are happy with our current franchise arrangements in India, our growth plans, and the current Coca-Cola business system. We do not have any developments or changes to report currently.

Coca-Cola India had to initiate voluntary separation programme in India last year. Will the company need to go for more such redundancies in line with the global restructuring plans?

The Coca-Cola Company is on a journey to transform how it operates so we can emerge stronger from the pandemic and accelerate our growth... As we implement these changes, there will be organisational restructuring to align with our strategic direction. There will likely be new opportunities available for our existing associates as we build a faster, and more effective organisation that creates shared local value.

Do you think sales will get back to pre-Covid levels and what are the strategies being put in place to fuel recovery? Is the resurgence in cases in certain regions a cause of concern?

We are witnessing early signs of recovery where the Covid-19 status is more stable and on the decline. We continue to evolve our business models to the changing scenario while staying close to our bottling partners, customers and suppliers. We are streamlining the innovation pipeline against initiatives that are scalable regionally or globally as well as maintain a disciplined approach to local experimentation. By streamlining our portfolio, we will continue to drive availability for smaller packs, drive innovation and roll out local drinks and flavours. The company is also investing in new capabilities to capitalize on emerging, lasting shifts in consumer behaviours.

Are you seeing recovery in the out-of-home channel?

Covid-19 and the subsequent lockdown impacted all businesses and sales significantly but we have witnessed improvement in both consumer sentiment and consumption. While away-from-home consumption in channels like travel, restaurants, entertainment and hospitality are on the revival path it may take a little longer to come back to normal. At-home consumption is robust and growing and has shown an increase in mix. We are working with our out-of-home customers to revive the business in a safe way. For the at-home consumers we are introducing new offerings and packs especially multi-packs and affordable entry home packs.

Will there be bigger focus on affordable priced variants and smaller packs, especially to grow sales in the rural region during this summer?

We are focused on bringing value to our customers and consumers through the brands we sell. Our pricing will be set in partnership with our customers and consistent with the value of our brands’.The new networked organisation and approach will enable all of us to work differently and scale key priorities across the enterprise while also leveraging our system’s localness to win in the marketplace. Our core focus areas are faster replenishment cycles at retail outlets, deeper distribution and servicing in-home consumption.

Do you expect e-commerce channel’s contribution to increase significantly with accelerated adoption of digital platforms?

We are expanding our digital presence through partnerships with multiple customer platforms. We have seen increase in digital commerce, and we are going to concentrate our efforts in that area significantly both in urban and rural markets. An example is our tie-up with Common Services Center, we have ensured rural last-mile delivery by listing all our popular products on their Grameen e-store platform — thereby building least-expensive solutions to essential hydration needs.

Published on March 22, 2021

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