Beverage major Coca-Cola India posted a net profit of ₹619.14 crore in the financial year ended March 31, 2020, down 2 per cent compared to ₹631.69 crore in the previous fiscal due to higher marketing spends. The company’s revenues in FY20 surged by 18.16 per cent to ₹2,811.99 crore from ₹ 2,379.78 crore in the previous fiscal, according to financial data sourced from business intelligence platform Tofler.
When contacted, a spokesperson for Coca-Cola India told BusinessLine that the marginal drop in profit was on account of the company’s marketing expenditures. “Our performance in the last financial year was led by strong volumes across the portfolio, driven by better operational execution and availability along with improved consumer demands. Going forward, Coca-Cola in India will be a more local company, with strong local partnerships, creating shared value for Indian customers, partners and stakeholders,” the company’s spokesperson added. These figures do not include financials of the company’s bottling arm, Hindustan Coca-Cola Beverages, which is a separate entity.
Consumption trends
The pandemic year has been exceptionally tough for the beverage industry as it heavily relies on out-of-home consumption, which was severely impacted due to the nationwide lockdown. But industry players said they have begun witnessing an uptick in the out-of-home channel sales during the ongoing festival period.
Replying to a query on recovery trends, the company’s spokesperson said: “In the last few months we have witnessed improved consumer sentiments and consumption trends. In the recently concluded Q3 investor call, James Quincey, Chairman and CEO, The Coca-Cola Company also called out that recovery efforts in India continue and the company has seen meaningful improvement in the face of ongoing restrictions.”
Adding to that, he also said “local champions” such as Thums Up in India saw growth in the third quarter. “We continue to invest in our future,” he said.
In August, the beverage major had announced its strategic global re-organisation exercise, under which it decided to merge 17 business units to set up nine new operating units. Earlier this month, the company also announced sweeping changes in the senior leadership team in the India and South West Asia business unit as well as at Hindustan Coca-Cola Beverages Ltd.
“We believe in the promise and incredible growth potential of India and as we speak, we are on course to create a more networked organisation to emerge stronger and capture this growth potential. We are investing in building brands improving our availability across channels and consumer base along with new capabilities and new business models, all supported by an ecosystem of new local partnerships,” the beverage major added.
Also read:
Also read: