How Coca-Cola India fights inflation
The second quarter of FY 22-23 has been the best ever quarter for Coca-Cola Company in India in terms of volume growth. The business added a billion incremental transactions in the quarter, with its distribution touching 4 million outlets. This growth has come at a time when the country is battling inflation and consumption has dipped. The beverage maker’s strategy says Sanket Ray, president (India and Southwest Asia), The Coca-Cola Company, has been to play the volume game. “We have managed to hold on to the affordable packs but we have taken price increases in the bigger packs. Almost 80% of our growth has come from volume and 20% from pricing, unlike other FMCG companies for which it has been the other way round.”
Ray doesn’t rule out more price increases. “We will cover it through our bridge packs which we are bringing in temporarily so that we don’t lose penetration. Instead of a large two-litre PET which we sell for ₹100 we are giving consumers a pack of six 200 ml bottles at ₹20, which he/she can take home. The consumer will drink less but more frequently and for me it’s a price increase as I am giving six bottles for ₹20 each, so it is ₹120, as opposed to a two-litre bottle which is ₹100. That’s how we manage inflation without tinkering with margins,” he further explains.