Coca-Cola India President Venkatesh Kini is neither worried about rising competition from newer beverage brands nor the hullabulla around the health effects of carbonated beverages. He is focused on his only goal: to double India revenues by 2020. Kini talks about Coke’s India challenges and more in a free-wheeling chat with BusinessLine .
The sales of carbonated drinks is going down in India as there is increasing health awareness. Does that impact you?
Firstly, we are not seeing a reduction in consumption. The per capita consumption of carbonated drinks is growing and it is one of the fastest growing beverage categories. The reality is that we contribute less than 2 per cent of the calories. Two cookies contain more calories than a cola. For consumers who are looking to cut back on calories, we have launched Coke Zero. It is a ₹100-crore brand and well accepted.
I think we have internal competition like Maaza and Minute Maid. We believe that India’s got so much potential that we welcome competition, especially local, as it shows us where opportunities are and there’s room for everyone.
Coca-Cola is focused only on beverages, with no presence in the snack food category. Don’t you think a diversified model works better in challenging times?
There was a time when we owned film studios, wineries and even shrimp farms. That was the 1980s, when diversification was the name of the game. What we have learnt over the years is that it is better to focus on one industry segment where you can be the best in the world and then keep growing your share of it and brewing that industry.
What about the Indian market?
An Indian drinks 56 glasses of liquid a week on an average. We are just one of those glasses. We will keep investing as long as we get a larger share of that. Even if we go from one to two, we would have done that. That is our 2020 target — to double revenues.
What is your strategy to achieve that target?
It is very hard to grow when you are a big brand. It is very easy to grow when you are a start-up.
We often tend to get swayed by stories of growth. As a large company, it is the sweat and perspiration that will get us the growth — getting the right product at the right price point, size; growing in existing stores, increasing our velocity and finding new retailers.
How has been the response to your milk-based beverage Vio?
Vio has been piloted in one channel in Andhra Pradesh. The response has been good but it is very early days. We believe that unless we persevere in it for five years, we are not going to get anywhere in the country. There is a misconception that we can get a product popular at the click of a button. It takes many years to get the distribution and other aspects right. We are just scratching the surface.
You had to close some bottling plants here. How do these measures impact your operations in India?
We have not given up factory licences, but kept them dormant. We have 57 factories in India of which five were set up in the last three years.
Sometimes in order to manage short-term fluctuations, we have to shift production to some other location. We use older locations to meet peak demand. It is a highly seasonal business in India.
How important is India in Coca-Cola’s global map?
We are number six by volume and target to be among the top five by 2020. We see India as the bright spot in the global economy and one of the highest growth potential countries.
So we will only accelerate our investments here. Since 2014, we have been investing about ₹1,000 crore a year only in factories. We are on track to complete the $5-billion investment by 2020 here.