Coca-Cola, Jubilant alliance map aggressive cost cuts and supply gains to boost India profits: Report – Industry News

Coca-Cola Co and the Jubilant Bhartia Group aim to boost profitability by intensifying cost-cutting measures, streamlining manufacturing operations, expanding last-mile distribution, and securing more cost-efficient supplier agreements, a report by the Economic Times stated citing executives familiar with the matter. 

Earlier in July this year, the Jubilant Bhartia Group had announced that it has completed the acquisition of a 40 per cent equity stake in Hindustan Coca-Cola Holdings Private Limited (HCCH), the largest bottler for The Coca-Cola Company in India, for Rs 1,17,04,40,00,000. 

However, according to the executives who talked to the Economic Times, HCCB will continue to be operating under the guidance of the HCCB board and not Jubilant Beverages which holds a minority 40 per cent stake. 

Coca-Cola CEO sees ‘new energy’ in India strategy

Recently, HCCB had appointed Hemant Rupani, former president of Mondelez Southeast Asia, as its new chief executive, to replace outgoing chief executive Juan Pablo Rodriguez, effective September 8. During an earnings call last month, Coca-Cola Co CEO James Quincey had said the tie-up between HCCB and the Jubilant Group would inject “new energy, dynamism, focus, and proactivity” into marketplace execution.

“So, we think we’ve got a strong plan from a marketing and innovation point of view. With some re-energised focus on this transition bottler, we are pretty confident about where we’re heading in India,” he had said.

Rising rivalry: Reliance’s Campa and regional brands gain ground

India has been witnessing increased competition in the soft drinks segment with Reliance’s Campa investing heavily on acquiring or setting up plants to go national within a year, and many regional soft drinks taking share from incumbents like Coca-Cola and PepsiCo. 

“Apart from carbonated drinks, flavoured waters, juices and nectars, herbal teas, sports and energy drinks and ready-to-drink coffees too are witnessing intensified battle for a share in the packaged beverages market. Apart from Campa, newer and smaller brands such as Lahori, Bindu, Storia, Roastea, Pluckk and Tru are posing a serious challenge to the legacy brands,” one of the executives told the publication. 

Global giants respond with smaller packs, low-sugar variants

In order to combat the threat from these regional players, Coca-Cola and PepsiCo have been introducing smaller than usual packs at mass prices and low and no-sugar variants.

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