At a time when the packaged food and beverages products are under public scrutiny due to safety concerns, Venkatesh Kini, President, Coca-Cola India and South West Asia, said: “We have learnt to make sure our own internal tests and controls are made fool-proof, so that no questions or doubts are raised about the safety of our products.” Despite the dampened growth for soft drink companies this summer season, Kini said his company is continuing with investments and bullish on the country’s growth. With the success of Coca-Cola Zero, which has emerged as one of the fastest growing FMCG brand in India to hit the ₹50-crore mark in terms of sale revenues within a year of launch, Kini told BusinessLine that the company will also look at pushing other premium products. Excerpts:
The summer season has not been very good for beverage companies. How has that changed your strategy?
We have had a slow summer this year. But having been in the country for long we have learnt to cope with the ups and downs. We have also learnt that the best time to invest is when things are not going so well, so when the upturn comes you are ready and you are stronger.
We have continued to invest in the business. We have invested in three greenfield projects in the last 12-15 months. We are committed to our goals — to be among the top five markets in the world globally by volume (by 2020) as well as to continue to invest in the country create jobs and launch more products and make a wider choice available to our consumers.
How do you tackle the problems of low demand in rural markets?
Our bottling system led by Hindustan Coca-Cola Beverages has made tremendous investments in rural distribution and innovation. They are scaling up some of their distribution initiatives like taking fountain machines to small towns and make our beverages available at affordable prices. We have also been trying to innovate packaging. For instance, we have launched the 300-ml package, for the sparkling drinks, for on-the-go consumption. Innovations in packaging like these will drive availability in smaller retail outlets and smaller villages and towns.
Coca-Cola Zero has been a success. What worked for the product and what have been the learnings?
We decided to launch Coca-Cola Zero, without much of market research in the country as there already was brand awareness. But what we learnt with this launch is the power of digital medium as a marketing tool and the e-commerce platform. India is not a market where just about everything that sells overseas will sell. One needs to make sure the product is relevant and marketed in the right way. Coca-Cola Zero has exceeded our expectations.
In recent times you have changed your strategy for high-margin premium products. Would we see a lot more premium products like Fuze Tea in the future?
We realised that the retail outlets that sell our premium products are a smaller sub-set of the retailers that sell our core products. The sales teams that are managing these products need to be different. It requires a different set of metrics. We have been experimenting with our bottling arm — which has now got two selling systems. We are looking at replicating it with our independent franchise bottlers and we have created a division to manage that. The company has been focusing on premium products with brands like Schweppes and now with Fuze Tea. There is a growing segment of global Indians who travel overseas and have tasted these products internationally and want them.
Packaged food and beverage products have been facing scrutiny under food safety laws during the past few months. What is your opinion?
We have been through our share of controversies in the past, where questions were raised about the safety of our products.
Through our experience we have learnt to make sure our own internal tests and controls are made fool-proof, so that no questions or doubts are raised about the safety of our products.
We can say with the confidence today, that we have so much data and information about our products that we can answer any query.
Not that our products were ever unsafe but we have built our database to the point where we believe we have done the best we can.
Besides, we adhere to the highest international standards and take the most conservative view of the law.
Ultimately, laws are written by people and are subject to interpretations, and no one can ever write a law that is flawlessly perfect and that it can cover every future eventuality.
We take the most stringent and conservative view of the law.
We don’t launch a product till we have all the approvals and permissions in place. This is one of the reasons, we plan our product pipeline three years in advance.