Costa Coffee, a coffee chain brand owned by Coca-Cola, will be expanded to newer cities aiming to have a pan-India presence in the next three years. Coca cola is going for Innovation to be the “key growth engine” in India as it is contributing 15-20 per cent in growth and the beverage major will focus on urban areas by adding premium offerings and expanding its rural footprints with affordable options, said its President (India and Southwest Asia) Sanket Ray.
Costa Coffee’s is a small business compared to rivals such as Starbucks in the coffee chain segment and present in a very small number of cities. Coca Cola’s goal is to expand the chain and be a pan-India player in the next three years by expanding in top 10-20 cities.
Costa Coffee chain is operated in India by Devyani International Ltd, owned by RJ Corp, which is also a bottling partner of rival PepsiCo. Costa Coffee was acquired by the Coca-Cola Company in 2018 from Whitbread Plc. Over the e-commerce and channels that have witnessed exponential growth after the pandemic.
The beverage giant will use the strength of its channel partners in both business-to-business and business-to-consumer spaces in 2022 and has no such plans for direct-to-consumer as no specific exclusive brand right now.
Coca-Cola India is also expanding its network in rural areas, which nearly contribute 38 per cent to the overall business. It had focused more on the urban market in the pandemic-impacted 2021 than rural areas, due to affordability and other issues.
According to Ray, the business of Coca-Cola India is still under-penetrated in the consumer business category and will grow its business through expansion of the portfolio, marketing and distribution.
Strengthening its portfolio, Coca-Cola recently introduced ‘Zero Sugar’ in December in India and more new categories will come in. In the new category, it would not only be global brands but also local brands, with regional flavours, also the cola major is now taking its sparkling Zeera (cumin) flavour drink RimZim to the national level with a strong campaign and distribution drive. In local flavour, Coca-Cola is going to launch ‘aam Panna’ flavour under its mango-based drink Maaza.
Similarly, Coca cola is also looking to launch in the sports segment and something in the mass energy. This would be both from the global and local portfolio, in premium and affordable segments. The company has plans to introduce an apple sparkling drink under the brand Fanta next week also. The new products will be both in the fizz and non-fizz categories.
Currently, e-commerce contributes three per cent of the overall sales in India. Coca-Cola India had committed an investment of USD 1.7 billion towards creating a Fruit Circular Economy to aid the Indian agri-ecosystem till 2023. It is working on fruits such as mango, grapes, apple and litchi, getting them to its supply chain and sourcing.
Coca-Cola’s unit case volume grew 11 per cent in the Asia-Pacific market during 2021, driven by growth in markets such as China, India and the Philippines, the company had said last week in an earnings statement.