'Coke to tweak business models to adapt to new normal'

New Delhi: A top Coca-Cola executive said that any immediate consumption outlook for India may not be complete or even conclusive as the viral pandemic and an over two-month-long lockdown disrupted business, crippled supply chains and last-mile deliveries, and led to acute workforce shortage.T Krishnakumar, president of Coca-Cola India and Southwest Asia, told ET that while all businesses have been significantly impacted, the Indian unit is witnessing improvement in both consumer sentiment and consumption. The April-June quarter contributes more than half of annual sales of the over ₹20,000-crore packaged beverages industry, of which out-of-home consumption is about 80%. “Away from home consumption in channels like travel, restaurants, entertainment and hospitality may take a little longer to come back to normal. But at-home consumption is robust and growing… We continue to evolve our business models to the changing scenario,” Krishnakumar said.While almost all of Coca-Cola’s 50 factories have resumed production, the maker of Coke and Thums Up aerated drinks and Minute Maid juices will continue to focus on long-term growth and performance. “As the situation evolves, we will flex our business models to adapt to the new normal to deliver long-term shared value in India. We will get there sooner than later and we are positive about that,” he said. Large consumer goods companies in the packaged foods space have seen steady demand pick-up during the lockdown as consumers stayed indoors and stockpiled food. On the impact of PM Narendra Modi’s 'vocal for local' call to Indian companies and consumers to buy products made in the country, Krishnakumar said Coca-Cola is advancing its beverage localisation strategy and developing an ethnic portfolio to suit various regions. “We are a local company, all our products are manufactured locally, and almost all our ingredients are sourced locally. In fact, for the last few years we have gone from local to hyper local,” he said. Krishnakumar named Vio spiced buttermilk and fruit drink Minute Maid Nutriforce as examples of recent hyperlocalisation.In India, the world’s largest beverages maker competes with dozens of local and regional soft drinks brands, including Jayanti Cola, Sosyo and Ginlim, which play on hyper-localised flavours, trade push in smaller markets with lower pricing and minimal overheads on marketing.“The pandemic provides opportunities for us to recalibrate the economic and business models. It is an opportunity for us to collectively invest towards building businesses that are not only centered along the mega cities but are also extended to states,” Krishnamkumar said.He said the company worked through the lockdown and labour crisis since its workforce is mainly local, and that it has neither laid off employees nor reduced salary payouts.Coca-Cola, which bet big on cricket by picking up sponsorship in the IPL and a five-year global sponsorship deal with the ICC for an estimated ₹300 crore, plans to stay invested in cricket.

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