To expand its footprint in India's non-alcoholic ready-to-drink beverage market, Atlanta-based Coca-Cola Co. has announced an investment of $2 billion (Rs 10,000 crore) in the country over the next five years beginning 2012.
This is the company's largest investment in the country since its re-entry in 1993. The company, however, declined to give a break-up of the additional investments in its product basket which includes sparkling beverage, packaged water, juices, ready-to-drink tea and coffee.
These investments would be channelised into manufacturing assets, installing new lines and upgradation of existing lines, cold drinks and transportation equipment and supply chain investments, Mr Atul Singh, President and CEO, Coca-Cola India and South-West Asia, said at a media interaction here on Monday. This will include a greenfield manufacturing facility in Karnataka.
“We are looking at investments in both urban and rural markets, which will drive our consumption growth. We want to capitalise on the young demographic profile change taking place in India and Sub-Saharan Africa. We also see opportunity to expand in the retail and transportation segments with more consumers travelling.”
The carbonated soft drinks market in India is estimated at Rs 13,000 crore. The non-alcoholic ready-to-drink market is about Rs 20,000 crore which comprises the carbonated soft drinks, juices and packaged water categories. It is growing at around 15 per cent which makes it among the fastest growing markets along with China and some Latin American countries.
The move is in line with the views of former Coca-Cola CEO, Mr Neville Isdell, who has highlighted India's role in helping offset weaker consumer demand in the home markets of North America.
Envisaging India's role in the company's long-term vision, Mr Ahmet C. Bozer, Coca-Cola's President, Eurasia and Africa group, said: “Through this investment we are looking to capture the opportunity that India has to offer for us beyond 2020. It signals that India has passed a certain threshold and from here onwards, the scale gets bigger. We expect India to be within the top 10 countries in the world in terms of our investments.”
As of last year, India accounted for 13 per cent of the company's revenues from Eurasia and Africa which, contributes 60-70 per cent of the company's global revenues.