SLMG Beverages, the largest bottler for Coca-Cola in India, may increase prices of some of its products if rising packaging costs linked to the ongoing conflict in the Middle East persist, a senior company executive told Reuters.
“If the war continues, the packaging material cost may continue to move up,” Rahul Kumar, deputy CEO at SLMG, told Reuters in an interview earlier this month. He added that any price hikes would depend on factors such as competitor actions and consumer response to higher prices.
Water to be expensive
The conflict has pushed up the cost of key packaging inputs, including plastic bottles, caps, labels and cardboard boxes. Some packaged water manufacturers have already raised prices in response, according to Reuters.
However, as per the report, SLMG faces limited room to pass on costs in India’s highly competitive soft drinks market. The pricing pressure has intensified after Reliance Industries, led by billionaire Mukesh Ambani, relaunched the Campa Cola brand in 2023. This, as per the report, has triggered a price war as Reliance is leveraging its wide retail network and brand positioning in the country.
Kumar noted that there has been no portfolio-wide price increase in the past seven to eight years. The company will review pricing in April.
Capacity expansion to tap growth
Despite competitive pressures, SLMG remains bullish on demand growth. According to Redseer Strategy Consultants, India’s non-alcoholic ready-to-drink beverages market could double to around $40 billion by 2030, Reuters reported.
To capitalise on this opportunity, SLMG, which accounts for more than 22% of Coca-Cola’s India volumes, plans to invest between Rs 10 billion and Rs 12 billion in each of four new plants over the next five years, as per Reuters. The company has also posted strong financial growth. Its sales rose 49% to Rs 67.73 billion in FY25, while net profit increased 76% to Rs 2.06 billion, Reuters added.
Looking ahead, SLMG is targeting net revenue of Rs 100 billion by FY27. The expansion strategy includes deeper penetration in populous, lower-income states such as Bihar and Uttar Pradesh, where low per capita consumption and rising incomes are expected to drive demand, Reuters noted.