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Coca-Cola on Wednesday said higher-than-normal monsoons in a number of states had an adverse impact on volume growth in India in the third quarter but expects the market to return to growth path in the coming months. The beverage major, which released its third-quarter earnings, saw unit volume cases register a 2 per cent decline.
On an earnings call, James Quincey, Chairman and CEO of the Coca-Cola Company, said, “In India, volume declined in states that were impacted by higher-than-normal monsoons. In geographic areas that were unaffected, volume grew mid-single digits. We remain upbeat about progress in integrated execution and our ability to capture long-term growth opportunities.”
Heavy rains and floods have impacted the FMCG industry in the September quarter, especially the beverage companies, which witnessed sluggish growth in domestic volumes.
“India had a particularly heavy monsoon in a number of states and that affected the volume. Actually, by the way, heavy monsoons tend to be a good predictor of agricultural yield, which would be then better next year,” he added. Terming the impact of heavy rains as a “temporary factor,” Quincey stated that the company is “looking for India to return to growth”
In terms of performance of its bottling investments, which represent company-owned bottling operations, Coca-Cola said that “unit case volume declined 31 per cent, largely due to the impact of the refranchising of bottling operations.”
In January, the beverage major had divested company-owned bottling operations in India in three territories to its independent bottling partners, including Bihar, Rajasthan, the Northeast, and parts of West Bengal. “During the nine months ended September 27, 2024, the company recorded a net gain of $290 million related to the refranchising of our bottling operations in certain territories in India, including the impact of post-closing adjustments,” it noted in its earnings statement.
The packaged food and beverage industry has been betting big on the festival season. Coca-Cola India had earlier stated that it is witnessing positive momentum in sales, with a notable trend towards festival consumption.
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