US-based beverages giant Coca-Cola Company will invest $5 billion ( Rs. 28,500 crore) in its India operations in the next eight years. This is $3 billion ( Rs. 17,100 crore) more than what it had budgeted earlier and includes investments by the company’s bottling partners.
Coca-Cola Co. Chairman and CEO Muhtar Kent attends a meeting in New Delhi. The world's biggest beverage maker plans to invest US$5 billion in India from 2012 to 2020. AP Photo/Manish Swarup
“We’re absolutely confident this is the right decision, given the vast growth opportunities here in India,” Coca-Cola chairman and CEO Muhtar Kent said. “Our India story is one of a remarkable turnaround. Six years ago, we were not strong here. Today, our India business aspires to be among the Top 5 countries by volume in the entire Coca-Cola system by 2020.”
The ongoing slowdown in India doesn't bother him very much. "It is wrong to say the world is slowing down. Don't forget the law of numbers. A 6% growth in India today delivers a much larger incremental GDP today than it did earlier."
Kent's key drivers of hope are India's young demographics, economic and social trends. Add the small base and his investments may be in the right place. Against a global average of 92 servings of Coke products a year, the number for India is 12 — the lowest among large economies like China (38), Russia (73), Brazil (230), South Africa (247) and the US (403).
Perhaps what India lacks on a per capita basis would be neutralised by its mass of 1.1 billion people. How will that story play out? “Every region of the world will have its own way to get to 2020. We assume we will be able to crack the calculus for growth.”
But for a world that is getting increasingly conscious of health, for how long can Coca-Cola survive by selling sweetened water?
“We provide choices, marketing, labelling, awareness about energy balance and so on.
“We play a meaningful role around over-nutrition (obesity) as well as under nutrition.”
In India, for instance, minerals-and vitamins-enriched Vitingo is sold in rural areas of Orissa, UP and Bihar. “As far as decision goes, all I can tell you is that it is the consumer who decides.”
Kent sees traces of India — he stayed here from 1960 to 62 — in his company: “India is a wonderfully diverse country. In three words, India is: young, dynamic, emergent. These three words also describe Coca-Cola.”