Coca-Cola Inc. is set to invest about Rs.1000 crore ($250 million) in India over the next three years to keep pace with its rival PepsiCo Inc., which presently dominates the local $1.75 billion soft drinks market.
According to Edward Neville Isdell, the chief executive of the world's largest non-alcoholic beverages manufacturer, Coca-Cola is keen to make India one of its top ten markets in the world in terms of volumes and it will not hesitate on injecting funds to expand its Indian operations. We are bullish on India. It is a matter of stimulation...as the growth comes, you have to put in incremental investments, Isdell said, in an interview with Economic Times.
We are investing $250 million. This will not be the last. More investments will come, he added. Coca-Cola has already spent $1.2 billion over the last decade to strengthen its distribution and marketing infrastructure.
Admitting that rival PepsiCo's CEO Indra Nooyi drives us to compete very hard, Isdell said India, which is one of the fastest growing soft drinks market in the world, poses a challenge to the soft drinks giant to maintain and accelerate growth.
India is growing phenomenally…It is about putting the basics together and removing the drags on growth. Constant rebuilding is also significant to increase the market share and widen our presence. All this should have a clear focus, Isdell said, adding heavy responsibility rests on the shoulders of Atul Singh, head of Coca-Cola India.
Pepsi is slightly ahead of us. But the issue is total business. Cola-to-cola, we are ahead. Every sub-category like lemon and orange, we are ahead. Four out of top five brands are ours, he said.
According to Isdell, Coca-Cola is now profitable in terms of both operating and net profit and has set its sight on emerging markets like India and Latin America to fuel its growth. With strong growth in emerging markets, like India and Latin America, and the benefit of a weak dollar on our side, we should achieve good global growth this year, he said.
And, to make sure that it can keep up with the demand for non-alcoholic beverages this summer, the company has set up a new manufacturing facility for its fruit juice line at Nabhipur in Rajpura district of Punjab.
Coca-Cola is also set to launch a slew of new products, ranging from an 'aam panna' variant for its mango drink Maaza to more sports and energy drinks, and is targeting different segments of consumers. And, for those who watch their calories, the company, which boasts that Coke Zero have been in top 10 most successful launches, is working on a natural, non-nutrient sweetener with Cargill.
The soft drinks giant is also sparring with PepsiCo in the advertising segment. To reach out its products to the 1 billion-plus people of India, Coca-Cola has pitted popular Bollywood actor Hrithik Roshan against PepsiCo's brand ambassador, Shah Rukh Khan.
And, with the much-anticipated Twenty20 cricket tournament, the Indian Premier League (IPL), round the corner, both companies have splurged millions of dollars to bag prime time advertising rights. While PepsiCo has spent Rs.45 crore ($10.5 million) to become the official beverage partner of the IPL for a five-year term, Coca-Cola has spent about Rs.20 crore ($5 million) for a one-year contract with IPL to become its on-air associate sponsor. In other words, though viewers will see the brand Pepsi plastered all over the ground, on beverage carts and during the awards ceremony of the IPL, Coca-Cola will get exclusivity during commercial breaks i.e. PepsiCo will not be able to advertise its products during commercial breaks.