I want long-term sustainable growth

Written by Diksha Dutta | Diksha Dutta | Updated: Apr 20 2012, 06:13am hrs
For Atul Singh, president and CEO of Coca Cola India, timing determines the choice of beverage. Our luncheon meeting with him had to be shifted to tea time because of some important meetings cropping up at the last moment. So, post-lunch, as we strolled to the Trident Hotel in Gurgaon, which is very near Coke's office, the first remark Singh expressed was regret that he could not serve beer since the timing was not right. If it was the right time, say 7 pm, I would have offered you beer! But what would you want to have now Before one could answer, Singh looked around and expressed surprise at people not following the dictum of doing the right thing at the right time. I see people having lunch at this hour, strange!

In a way, timing played a role in Singhs ascendancy to the job he holds todayheading Coca Colas South West Asia and India business. A 14-year veteran with the company, Singh took charge of his current assignment in 2005, at a time when the the controversy over pesticides in the soft drink had hit the industry badly. Revenues were not growing at their best and there was a shuffle happening among the top management. As he settled in, Vision 2020 was drawn globally and for specific countries as well. Time passed, the pesticides controversy was handled, the focus shifted to health drinks and juices, and business returned to normal. In fact, around four months ago, Coca Cola announced an investment of $2 billion in the Indian market. India is growing and we are investing at the right time. We want India to be in the top five global markets for Coca Cola; that will happen at the appropriate time too, he says.

If Singh did not find it the time right for a beer, nor did he think it fit for even a Coke, as he settled for tea, calling it perfect for 3.30 pm. Having missed beer, I prefer to sip Diet Coke instead, as we sat for our chat in the open area of the Cilantro coffee shop at Trident.

Pricing is key to the products Coke or its global rival PepsiCo sell, so the first thing I asked him was whether any price cut was in the offing as the summer season sets in. Singh explained with an anecdote, You are drinking Diet Coke here. The price that you will pay here will be very different from a kirana shop MRP. But, you do not mind because of the occasion and the ambience. The message was clear, Coca Cola is not looking at lowering the prices in metros, but at the same time will offer smaller packages in rural areas. Singh says his strategy depends on OBPPCoccasion, brand, pack, price and channel.

He boasts of 22 consecutive growth quarters for the company, with 16 double-digit growth quarters amongst them. The sparkling cold beverage market grew at a rate of 17.3% last year and Coke India grew at 20% last quarter. While everybody is busy talking about signs of slowdown, is it that the beverage market is immune from any such thing This seems like an inappropriate question to Singh. He answers with sarcastic laughter, shared with one of his colleagues who joined us for the meeting: We work hard to get this. Dont we work hard Its not easy. These are all top categories of beverages that we compete in. The team works out of the box to ensure that there is growth, whatever be the macro-economic conditions.

There are different categories in which Coke competes in India now and the company is innovating hard as consumers get spoiled with more choices and some start getting health conscious. To promote the juices, energy drinks and other niche products Coke had set up a separate division in India last year in December. We now have a different brand manager for non-fizzy drinks; earlier it used to be the same executive handling marketing for sparkling as well as non sparkling. So we are taking care of the different segments, says Singh, explaining the strategy of Coke.

After an exhaustive description of Coca Colas new-found focus areas, Singh orders another tea for himself. This is a segment (tea and coffee) which contributes very less to our overall business, he tells us while ordering a refill. He says that Coke has to and does work with universities, colleges, malls and outlets like McDonald to promote the Georgia tea and coffee brand. There is still a lot of potential in this market. It is in a test marketing phase.

As Singh talks about each product of Coca Cola, one can figure out the passion he has for his job. He agrees: I believe you should always do things which you enjoy in life, and I have always done that. Even though life has been busy always, it has been exciting for me! He recalls his college days, When I was studying commerce at St Xaviers Calcutta, classes used to start at 6 am and end at 9.40 am. So, I started working at the age of 16 with a chartered accountant. I was fond of numbers then, but not now, he says, smiling.

Definitely, digging too much into numbers does not excite Singh. Coca Cola did have a much lower growth rate than PepsiCo in the first two quarters of 2011. When I quizzed Singh on that, his response was philosophic. I want long-term sustainable growth. Last five and a half years of continuous growth, this shows sustainability. If in one quarter there is single-digit growth, it does not matter.

Before parting, I tried my luck at finding out what new launches Coca Cola was planning, but Singh knew full well that this question was coming. I am not going to let the cat out of the bag, said he.