Coca-Cola remains driven to bottling ops in India: Venkatesh Kini

By Viveat Susan Pinto & Arnab Dutta , Business Standard | In Marketing | September 23, 2016
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Interview with President, Coca-Cola India & South West Asia.

The best way to market a product is to use it yourself. No one knows this better than Venkatesh Kini, president, Coca-Cola India and South West Asia. The head of the largest beverage maker in India reaches out for his Coke bottle twice a day. In this interview with Viveat Susan Pinto and Arnab Dutta, Kini responds to a range of issues - from whether Coca-Cola will get out of bottling operations in India to the resistance it continues to face on groundwater management and the missed opportunity of launching the country's first stevia-based drink. Excerpts:

You have said Coca-Cola is on course in terms of investing the $5 billion it committed here in 2012. Then why does speculation continue of the company looking to exit bottling operations in the country?

Our commitment to India remains high. In the last three years, we've commissioned three greenfield projects that would qualify as mega projects in the respective states where they are coming up. What we have done at the same time is that we've stopped production in some smaller plants to make our manufacturing system more efficient. The idea is to derive more scale out of our manufacturing plants. So, based on the demand pattern, we either slow down production in certain locations or ship production to locations that are viable. It is an ongoing exercise we undertake.

Will you get out of bottling operations in the future, which your parent has done in the US? The trend in key markets for Coca-Cola seems to be to exit bottling operations altogether. How long can India resist this?

Coca-Cola remains committed to company bottling operations in South East Asia and India. We have a hybrid model in India of independent franchise bottlers and company-owned bottling operations. This has served us well for over 10 years and we don't anticipate a change in the foreseeable future.

While Coca-Cola has attempted to address the issue of groundwater management, regulators, affected communities and activists say you are not doing enough. Is there a disconnect somewhere?

Our environmental practices are best-in-class in the country. This is a result of years of learning, at times painful learning, recognising that it is not enough to be compliant with the law alone. We have to do more. In the past few years, we have taken this initiative to the next level of not just getting government permissions for our plants, but doing enough and more so that the local communities welcome us in their midst. When you have 57 factories, there will always be a situation where the local authorities may question your practices. And because this is Coca-Cola, a small issue gets widely publicised. India is a thriving democracy. There will be a difference of opinion in local communities regarding who should get priority when it comes to a precious resource such as water. We have to accept that. It is, therefore, not enough for us to say we are part of the problem. We have to be part of the solution.

Coca-Cola missed the bus in launching the country's first stevia-based drink. That credit now goes to your rival PepsiCo India. What is Coca-Cola doing to respond to this?

We are evaluating all beverage options, including stevia-based drinks as well as no-sugar variants. Coke Zero has been launched and has a turnover of Rs 100 crore. Sprite Zero is currently available in select modern trade outlets. We have the range; the question is the timing of the launch, which we are evaluating.

You had a closed-door meeting with the Food Processing Minister Harsimrat Kaur Badal on Thursday. What were the points of discussion?

The minister wanted to know how investment could be accelerated in the country in food processing that would benefit both the farmer and consumer. She has been a friend of the food processing industry, having worked tirelessly with the Food Safety & Standards Authority to make things easier for food processors. She took suggestions on what we could do to increase investments here.

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