Date:17/02/2004 URL: http://www.thehindubusinessline.com/2004/02/17/stories/2004021702570500.htm

Back Coke summer agenda pitches on affordability

Ratna Bhushan

New Delhi , Feb. 16

WITH the objective of putting the pesticide issue behind it, Coca-Cola India has outlined a comprehensive growth plan for the forthcoming peak summer season pitched on affordability, driving topline growth and aggressive cost reduction.

Mr Sanjiv Gupta, President and Chief Executive Officer, Coca-Cola India, told Business Line that while topline growth would be driven by continuing with its affordability strategy and driving home consumption, the bottomline focus would be on aggressive cost reduction. The company proposes to follow a high-volume, high-growth, low-cost model for sustained long-term growth, Mr Gupta said.

The company has begun a nationwide rollout of 600-ml PET packs priced at Rs 15 for each of its soft drink brands. The packs had been tested in Maharashtra last year. "We are hopeful that this pack will do for us in home consumption what the Rs 5, 200-ml strategy did for us at the retail level," Mr Gupta said.

The PET strategy would be two-pronged: While the 600-ml pack will be at the entry level, the 1.5-litre pack, priced at Rs 30, is being positioned as a special occasion home pack. The 2.25-litre pack at Rs 40 will be a value-for-money pack.

Other points of focus would be improving retail-level penetration, increasing the number of outlets by 23 per cent and putting in place a low-cost fleet model to reduce investment and operating costs.

A relaunch of Sunfill, Coca-Cola's powder concentrate soft drink, is on the cards, Mr Gupta indicated. While variants of Fanta have been withdrawn, Shock will remain a brand on the slow burn.

Meanwhile, the Central Committee on Food Standards (CCFS), along with the Health Ministry, has recommended that water used in soft drinks should conform to the same norms as those set for packaged water. Coca-Cola continues to maintain that its products meet the necessary norms for drinking water for soft drinks.

The Atlanta-based Coca-Cola Company's results, declared last week, stated that while the pesticide controversy negatively impacted the company's financial performance in the short term, unit case volumes in India grew 22 per cent during the fourth quarter of the year.