India drove American cola giants Coke & Pepsi’s biz in 2021

Backed by a strong recovery in sales in the India market, cola giants Coca-Cola and PepsiCo reported a healthy growth for 2021 globally. As sales in the local market made a sharp comeback during the year, the American fast moving consumer goods (FMCG) companies - selling aerated drinks and packaged snacks - managed to grow their sales beyond the pre-COVID levels of 2019.

During the fiscal ended 25 December, 2021, New York, US-headquartered PepsiCo, reported a whopping 38 per cent growth in volume of its convenience foods business - primarily representing its popular snacks like Lays, Doritos and Kurkure. The company management today said during a post-earnings call at New York that “double-digit growth in India and Pakistan and high-single-digit growth in the Middle East” were key factors behind its superior performance.

PepsiCo that markets some of the fast-selling brand of fizzy drinks like Pepsi Cola, Mountain Dew and Mirinda, further said that its beverages business posted healthy volume growth. “Beverage unit volume grew 20 per cent, primarily reflecting double-digit growth in India and Pakistan. Additionally, the Middle East experienced double-digit growth and Nigeria experienced high-single-digit growth”, it added.

Coca-Cola - the largest aerated drinks player globally and in India - benefitted from better recovery in sales in the country too. In 2021, its unit case volume grew 8 per cent - overtaking the pre-COVID levels in 2019 as India emerged one of the key growth drivers. During the December quarter, its volumes grew by 11 per cent in the Asia Pacific region, driven by superior growth in markets like India and China. Incidentally, India is the fifth largest market by revenue contribution for the Atlanta-based cola giant.

“For both the (December) quarter and the year, growth in developing and emerging markets was led by China, India and Russia, while growth in developed markets was led by the United States, Mexico and the United Kingdom”, the company said in a post-earnings call.

According to James Quincey, CEO of Coca-Cola Company, Coke’s sales grew by nearly 30 per cent during the December quarter. “In India, initiates like omni-channel presence and marketing campaigns in key occasions by leveraging festivals through occasion-led marketing formed sequential increase in market share and nearly 30 per cent growth in transactions for the quarter”, Quincey said.

The marketer of popular cola brands like Thums Up, Sprite and Coca-Cola, in fact, had suffered heavily during the lockdowns earlier in India. In the September, 2020 quarter, poor sales in India led to a 10 per cent drop in its bottling business. While during the April-June 2020 quarter, Coca-Cola’s operations took a significant hit due to the stringent and prolonged lockdown in India. 

Disruption in the Indian market had impacted all aspects — from volume offtake to its key sparkling beverages business. Global volume offtake dropped 16 per cent year-on-year (YoY) and its aerated drinks business fell 12 per cent YoY, with the lockdown being the major factor. Products under its flagship Coca-Cola had contributed significantly towards the decline in its sparkling beverages business. The trademark Coca-Cola business fell 7 per cent, while the Coke Zero Sugar segment declined by 4 per cent.

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