In the face of inflationary challenges, Coca-Cola India has successfully penetrated the hinterlands of the country, surpassing the growth rates observed in urban areas. The company attributes this success to expanded electrification, rising incomes, increased government expenditure, and the adoption of Unified Payments Interface (UPI) in rural regions, facilitating seamless small-ticket transactions.
Sundeep Bajoria, VP of India operations at Coca-Cola India, emphasized the brand’s commitment to devising an effective pricing strategy, particularly focusing on key rural price points such as Rs 10, 20, and 50. This targeted approach has contributed to the company’s significant growth in approximately 3.2 lakh villages, out of an estimated 6.6 lakh villages nationwide.
Bajoria acknowledged the role of government-supported infrastructure, including electrification and UPI, in driving rural growth. The digital penetration in these regions has also heightened consumer awareness, contributing to Coca-Cola India’s impressive rural expansion, which is currently outpacing urban growth by 3%.
The company strategically leveraged festivals as another significant occasion for beverage consumption, creating a second season for increased consumer engagement. Its association with the ongoing ICC Men’s Cricket World Cup has further reinforced this extended beverage consumption season.
Facing challenges from unseasonal rains earlier in the year, Coca-Cola India is betting on a robust festive season, planning its most substantial brand spending ever in India during the second half of 2023. Arnab Roy, Vice President of Marketing, expressed optimism about the company’s performance based on trends observed in Q3 and the beginning of Q4.
Investment during the World Cup and the festive season is expected to mark one of the largest ever in Q3 and Q4 combined in the history of Coca-Cola’s operations in India. The company is particularly focusing on activating its brands, including Thums Up, Limca Sportz, and Sprite, leveraging the ICC World Cup platform.
Coca-Cola’s global chairman, James Quincey, highlighted India’s resilient economy, strong job market, and robust consumption in the company’s global earnings statement. Affordability, driven by single-serve and at-home entry packs, played a key role in driving approximately 3 billion transactions in India.
The company attributed the growth of its India business to an increased number of retailers, investments in cold-drink equipment, and strategic pricing. As part of its integrated execution with bottling partners, Coca-Cola continues to raise the bar in India.
Looking ahead, while expanding rural coverage remains a primary focus, Coca-Cola India aims to tap into urban markets to drive premiumization. With 41% reach in urban households and 32% in rural households, the company sees significant potential for further expansion, leveraging its presence in 4.5 million stores in India amidst increasing per capita incomes.