Coca-Cola to focus on meeting demands of rural India

Coca-Cola sells brands such as Thums Up, Limca, Mazaa, Minute Maid, Nimbu Fresh which caters to the local taste.

Updated: Nov 02, 2011, 15:32 PM IST

New Delhi: Global beverages major Coca-Cola Company is tailoring its business to meet the requirements of rural India, which the company has identified as a 'huge opportunity'.

"There are 700 million people in India who live in rural area. We don't want to neglect them. We see a huge opportunity there," Coca-Cola Company Executive Vice-President and Chief Marketing and Commercial Officer Joseph Tripodi told reporters on the sidelines of AdAsia 2011.

He said with the Indian rural market offering a different variety of consumers, the company is tailoring its business to suit their requirements.

"We need to make our products available, we need to make the products are affordable, we need to make sure the packages are at the right size. So packaging, right price points, right availability are all important components," he said.

Besides, the company is also looking at the supply chain issues and how to optimise through innovative ways.

"How do we get our manufacturing closer to the people..we constantly look at innovations against on all these things. We are looking at supply chain, to optimise our supply chain...we are bullish on not only the urban centres but also what can happen on the rural environments," Tripodi said.

He also said Coca-Cola has done estimation on how the Indian middle class population will grow in the next decade projecting more growth opportunities for the firm.

"We project almost a billion people entering the middle class in the next decade (in India). Almost 800 million people are moving in the cities...when people move in to the cities their lives become fast and they want packaged beverage, that is s why we are very bullish on India," he said.

With such opportunities ahead, he said India is one of the most important markets across all dimensions of profit, people, partnerships and productivity for Coca-Cola.

"India is a strategic market for the Coca-Cola company that we have to have a significant presence in. We invest a lot of money in India. We have in the past and we will continue to do so in future. In the 21 quarters we have had nice double digit growth in India," Tripodi added.

Asked about localisation of taste in order to tap the market more intensely, he said: "There are big opportunities on flavours and appealing to the local palate which I'm very supportive of. I think it's definitely important to appeal to the local palate."

Citing the example of Mexico which is the most successful market for the company in terms of local brands or flavour extensions, he said the Fanta brand has 15 different flavour extensions in the country.
Trpodi, however, said there was a need to strike a balance between local brands or flavours and global brands to offer customers a perfect blend of choice.

"At the end of the day, it should be a balance between the local and global...We have to have the global brands like Sprite and Fanta, which is a big brand here (in India) at the same time we see tremendous opportunities for local brands," he said.

In India Coca-Cola sells brands such as Thums Up, Limca, Mazaa, Minute Maid, Nimbu Fresh which caters to the local taste.

Tripodi, however, cautioned against localising flavours too much saying it could backfire too.

"You have to be careful about extensive flavour extensions because sometimes it can come and bite you and can face a lot of complexities at the supply chain end. You might get a short spike in volume but its a false place to go at times...," he said.

While speaking about innovations in India, he said: "It could be through mergers and acquisition or it would include things developed in-house."

He also said the company will not only go for increasing volumes compromising its other core values.

"Chasing volume is not probably not the best thing to do and we learnt that mistake in US a few years ago," Tripodi said, adding a variety of packaging, different price points, consumer education on the products and a lot of sampling programmes would be the way forward.