The Coca-Cola Company, the world’s largest beverage firm, remains bullish about its India business despite a weak start to the 2024 calendar year, chairman & CEO James Quincey said in a post-results earnings call on Tuesday. The company follows a January-December accounting year.
Quincey also said that Indian brands such as Thums Up remained strong in terms of their sales performance in the country. The company has made net gains of $293 million related to refranchising of its bottling operations in certain territories in India this year, he said.
Tuesday saw the firm report its March quarter (Q1CY2024) results with net revenue rising 2.5% to $11.23 billion, ahead of Street estimates of $11.01 billion. On an adjusted basis, it earned 72 cents per share, against expectations of 70 cents, sector analysts said.
The India market, which is part of the Asia-Pacific region, saw a slow start in January and February, Quincey said, but sales have rebounded in March-April with the summer setting in and temperatures begin to soar in many parts.
In its Q1 earnings statement, Coca-Cola said growth in the Philippines, India, Vietnam and Indonesia, all part of the Asia-Pacific (APAC) region, was more than offset by a decline in China. Unit case volume growth in the APAC region declined 2% in Q1, the company said.
“We expect strong growth this year in India and remain bullish about our prospects in the country,” Quincey said, adding that Thums Up was getting the focus and attention it deserved. Acquired from Ramesh Chauhan thirty years ago, Thums Up crossed $1 billion in sales in India in CY23. Mango drink Maaza is likely to achieve the milestone this year, according to statements made by the firm earlier.
“If Thums Up were on its own, it could have become an FMCG company in its own right,” Quincey said about the brand, which remains the largest soft-drink in the country, endorsed by actor Salman Khan earlier and Shah Rukh Khan now.
Quincey also said retailers in India were leveraging AI-powered apps such as Coke Buddy to place bulk orders on the platform. While refranchising bottling operations in select Indian territories (including Rajasthan, Bihar and some parts of the north-east) was done to streamline company-owned and franchise-owned bottling operations in the country. Hindustan Coca-Cola Beverages (HCCB) is Coca-Cola’s largest bottler in India with 16 operational factories. Coca-Cola has 11 bottlers in India that operate 54 plants across the country.
Between December 2023 and March 2024, HCCB said it would set up new bottling plants in Gujarat and Telangana for Rs 3,000 crore each and in Madhya Pradesh for Rs 350 crore. One more unit in Maharashtra commenced operations in Khed, Ratnagiri in February at an investment of Rs 1,387 crore.
