Now, Maaza eyes entry into billion-dollar club

Maaza, the juice brand from Coca-Cola, is expected to enter the billion-dollar club by 2024. Two brands from the US beverage major — Thums Up and Sprite — have already achieved the status sometime ago. Coca-Cola in India is also looking at ONDC as a channel to beef up its e-commerce presence in the country, while also aims to offer more health drink options as a way to drive premiumisation.

Talking to reporters on Tuesday, Sanket Ray, president of India and Southwest Asia for The Coca-Cola Company, said: “We would like to have a juice brand getting into the billion dollar club, and we would love to have Maaza there. It should happen by 2024, but if it happens in 2023, it will be a bonus.”

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Ray said mango prices have touched significantly high levels, which have posed a significant challenge on costs, but the company is experimenting with different kinds of crops to control that.

The retail sales of Maaza were at Rs 3,000 crore till August 2022, and the company is looking to close the year with around Rs 4,500-5,000 crore, he added.

According to Ray, Coca-Cola will be focusing on the B2B space in terms of its e-commerce play, ensuring all channel partners are able to order products online with the company. He said it is a work in progress and will take sometime. “My first goal is to get my 4 million customer base to get to order online, which is still not done. I see ONDC as a big opportunity to scale directly there. We are working on that and focusing on ONDC. We will go straight to ONDC and cover the space that we need,” he added.

He said that instead of a direct-to-consumer channel, the company is focusing on B2B and B2C platforms, particularly quick commerce and food aggregators. “The challenge for me in D2C is how would traffic come if there was no traffic generator. With ONDC coming in, if they are able to generate traffic, we can get into that. We are registering as a supplier with ONDC, but it is too early to talk about sales that it is generating,” he said.

So far, the e-commerce channel contributes 2.4% to Coca-Cola sales, which has doubled in the last few years, Ray said.

As a strategy in India, Ray said Coca-Cola is focusing more on smaller packs over large packs, as people are becoming health-conscious and want to drink smaller quantities. Also, with rising inflation consumers want to spend less and the company is looking at “maintaining a magic price point”. “We find that people are fine with Rs 10 and Rs 20 and after that they do not care. So, our strategy is clear to keep a smaller sized bottle at Rs 20 price point and make them affordable and give them in a multi-packs, which is doing well for us,” he said.

He added that the small packs also are more profitable because while a 250 ml is priced at Rs 20, a 2L pack is Rs 99. In terms of revenue, smaller packs constitute closer to 55% of the company’s overall revenue mix, and this is increasing.

However, like other FMCG players, Coca-Cola is also focusing on premiumisation and its brand Schweppes will be driving that agenda. The company is looking to launch another range of Schweppes in the coming month in three new variants, including a non-alcoholic mojito. “That portfolio will increase and is not just about creating products. It is about scaling the existing range, driving the channel penetration and then increasing the SKUs and the packs,” he said.

While, most FMCG players have raised concerns about the rural market, Ray said that there are green shoots of recovery. “Rural and urban are coming into same growth now. We are seeing signs which give us confidence about rural recovery. Monsoon is good except in a few pockets, the urban job market is getting better, and many rural people are coming to towns for work which means money is going to go back to rural. The third trigger is the government capex programme which will create jobs in rural. So, macro factors show that rural recovery will happen,” he said.

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With the growing traction for health and wellness segment, Ray said the company is interested in a few categories, sports drink being one of them. The company has also launched a new juice infused with honey recently, and is also bifurcating its products into high, medium and low/zero sugar category. Coca-Cola will also be launching a Sprite Zero version soon.

“There are other interesting categories that we are looking at and in the coming time we will be entering a few…we will get into multiple categories which people traditionally believe are healthy,” he said.