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Coca Cola to ramp up India operations after sales boom

Global beverages firm says it will set aside significant chunk of capital to build capacity in India

Coca Cola to ramp up India operations after sales boom
[Source photo: Chetan Jha/Press Insider]

The Coca-Cola Co. is looking to pump up its operations in India by setting aside significant capital for the business on the back of a robust volume-led growth in the South Asian nation last year, the global beverages giant said following the release of its annual earnings.

In the earnings call, the drinks company said it recently completed the refranchising of a portion of its company-owned bottling operations in India to existing franchise bottlers.

India is the bottling giant’s fifth largest market globally. It has 11 franchise bottlers, including the company-owned Hindustan Coca-Cola Beverages Pvt. Ltd. These bottlers operate 54 plants across the company.

“A significant portion of our expected capital investment increase is to build capacity for Fairlife LLC (a dairy subsidiary) and for our India business, both of which experienced robust growth in 2023,” John Murphy, president and chief financial officer at Coca-Cola said during the earnings call.

The company, which spent $1.9 billion last year on capital expenditure, plans to increase it by 15% to about $2.2 billion this year, lower than the 25% jump in 2023 from the earlier period, Coca Cola said.

Explaining the rationale for boosting its capacity in India, Coca Cola chairman and chief executive officer James Quincey pointed out that the company is seeing “much more” growth in volume terms rather than price in the country.

“Places like the US we would expect to see stable or slightly increasing volume with decent pricing, all the way over to places like India where clearly we’re getting much more volume than price and having to invest significantly in capacity,” Quincey said.

“During the December quarter, we saw strong consumer demand across Australia, India, Latin America, Japan, and South Korea,” Quincey added.

The Atlanta-based drinks giant’s product profile in India includes Thums Up, Sprite, Fanta, Maaza, Kinley, and Minute Maid.

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