The world’s largest beverage company, Coca-Cola, drove nearly three billion transactions at affordable price points in India during the March quarter of 2023, as it sought to consolidate its position in one of its key markets, the firm said on Monday, while disclosing its financial results for the quarter. The company follows a January-December accounting year.
The company’s global unit case volume grew by 3%, and the beverage maker said it grew business in India by adding retailers, investing in cold drink equipment, and offering products at the right price points to recruit consumers.
The performance of India, Coca-Cola’s fifth largest market globally, prompted chairman & CEO James Quincey to say that the Indian economy was resilient during a post-results earnings call on Monday. “With a strong job market and robust consumption, the Indian economy remains resilient. We continue to raise the bar in India in integrated execution to deliver value for our consumers,” he said when addressing investors during the call.
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The beverage major also leveraged targeted promotions on large packages to increase its household penetration in India, even as it drove single-serve and at-home entry packs during the March quarter. It also expanded availability by 300,000 stores and around 40,000 coolers in India, ahead of the crucial summer season which falls between April and June.
But Quincey warned on the earnings call that there was “worse weather” in India and the US. He said, “We are two weeks into the second quarter. So, I don’t think there is anything particularly productive in it. I mean, they weren’t out of the park results in the first couple of weeks (of April), but there was some worse weather in India and the US and the shift of Easter.”
The March quarter initiatives, however, helped the company log a growth of 10% in unit case volumes in the Asia-Pacific (APAC) region, led by markets such as India, China and Australia.
“This integrated execution yielded strong results, as the company grew revenue ahead of transactions and grew transactions ahead of volume, while also growing value share in the sparkling soft drinks and juice categories in India,” the firm said.
Coca-Cola re-entered the India market in the 1990s, where it sells brands such as Thums-Up, Sprite, Fanta and Limca, apart from Coca-Cola or Coke.
“Juice, value-added dairy, and plant-based beverages were even, as strong growth in Fairlife in the United States, Minute Maid Pulpy in China, and Maaza in India was offset by the suspension of business in Russia,” it said.
Overall, the company reported a 5% growth in its net revenue to $11 billion in the March quarter, fueled by price hikes. Pricing and product mix — which includes changes in pack sizes — contributed 11% to its revenue growth while concentrate sales rose 1% in the quarter under review. The company said it expects to see slower growth this year as prices moderate. Price and product mix grew by 12% in each of the previous three quarters. In APAC, the company’s operating income declined 15% due to higher operating costs.