Coca-Cola eyes rural expansion to remain on top

Written by Lalitha Srinivasan | Updated: Apr 1 2014, 14:46pm hrs
Coca ColaCoca-Cola has signed up film stars Deepika Padukone and Farhan Akhtar to refresh brand communication.
Coca-Cola India and South West Asia chief Venkatesh Kini is betting big on rural expansion and product sampling strategies to sustain the company's leadership position in the Rs 30,000-crore Indian beverages market. At present, the company has 59% market share. The company has restructured rural distribution system and is experimenting with new models of product sampling to drive volumes. In an interview with Lalitha Srinivasan, Kini speaks on company's growth plans in India. Excerpts:

How does Coca-Cola India plans to face the market challenges this summer

We are working on enhancing the reach and distribution of brand Coke and our portfolio of beverages. We are experimenting with new models of product sampling and distribution.

On the communication front, we will be using the mobile medium to reach places with low mass media penetration to connect with rural folks. We have signed up film stars Deepika Padukone and Farhan Akhtar to refresh brand Coca-Cola communication. With this move, our aim is to target consumers in metros and smaller towns. This year, we also plan to enhance our focus on the low and no-calorie sparkling beverage segment. We are considering adding another zero-calorie product to our portfolio.

What is the motive behind the rural restructuring plans

Today, the rural markets account for one-third of our total volume. Going by the trends in urbanisation, rural contribution is likely to go up to 40-45% of our total volume as it is growing faster than the urban. We have restructured the entire distribution system to make it efficient to serve the smallest of villages and enable expansion of our distribution system.

Do you have any specific rural strategy this year

Our strategy is to focus on high quality products at affordable prices in rural India. We are now offering a 200-ml Coca-Cola glass bottle at R8, Maaza tetrafino pack at R7. Products like solar cooler -eKOCool and eutectic coolers are also helping our rural penetration. We are undertaking innovative sampling and distribution initiatives to target diverse audience.

What are the company's expansion plans in terms of manufacturing and distribution

To augment the manufacturing capacity, we are either putting new lines at existing plants or exploring the option of setting up greenfield plants. The Coca-Cola Company has announced its plans to invest $5 billion in India. This investment is towards augmenting manufacturing capacity by adding new lines, distribution and supply chain, horizontal retail expansion, route to market capabilities, and R&D projects.

Are you planning to enter dairy product segment or energy drink sector in India

We are constantly evaluating options to launch newer products or enhance the distribution of existing products. Maaza Milky Delite and BURN were being piloted as options in their respective categories.With good consumer response, we are scaling up the availability of these products.

How important is Coca-Cola India in your global operations

India is the seventh most important growth markets in the world as we work to achieve our 2020 Vision goal of doubling system revenues and servings this decade.