Strong growth in India lifts Coca-Cola’s Q1 business

Beverages maker Coca-Cola Co witnessed its business expand during the March quarter backed by strong growth in India market. The Atlanta, US-headquartered company reported increased penetration and billions of transactions in the India market ahead of the summer season, the company management said in earnings call on Monday.

According to Coca-Cola’s global management, its unit case volume grew 3 per cent during the quarter driven by the strong away-from-home channels and continued investments in the marketplace. While its growth in developed markets was led by Mexico, Western Europe and Australia, growth in developing and emerging markets was led by China, India and Brazil. Overall, its business in developed markets grew mid-single digits, while developing and emerging markets grew by low single digits.

In the Asia Pacific region, where India market figures in its operations, its unit case volume grew by a healthy 10 per cent year-on-year. It was driven by “strong growth across most categories and  was led by China, India and Australia”. During the quarter, Coca-Cola Company gained value share in total NARTD (non-aerated) beverages, led by share gains in Japan, India, Australia and Vietnam.

Coca-Cola’s superior performance in India was backed by certain measures that it had taken in preparation for the summer season that starts from April and drives nearly half of the yearly cola sales in India.

According to Coca-Cola management, “In close alignment with its bottling partners, continues to raise the bar in India in integrated execution to deliver value for its customers and consumers”. The company grew its business in the first quarter in India by adding retailers, investing in cold-drink equipment and offering the right products at the right price points to recruit consumers.

“During the first quarter, the company and its bottling partners increased availability by more than 300,000 stores and approximately 40,000 coolers ahead of the summer season and drove approximately 3 billion transactions at affordable price points through single-serve packages and at-home entry packs. The company also increased household penetration via targeted promotions on large packages for the at-home channel. This integrated execution yielded strong results, as the company grew revenue ahead of transactions and grew transactions ahead of volume, while also growing value share in the sparkling soft drinks and juice categories,” the firm in earnings call on Monday.

While its in-house bottling operations remained muted - unit case volume declined 1 per cent, primarily driven by the impact of refranchising bottling operations - strong growth in India helped it partially offset the slide.