Coca-Cola to Spend $5 Billion in India by 2020, CEO Says
Coca-Cola Co. (KO) said the company and its local partners plan to spend $5 billion in India by 2020 on expanding its distribution and adding capacity to meet rising demand in the world’s second-most populous nation.
The company and its bottling partners will invest $30 billion globally in five years on new plants and sales networks, Chief Executive Officer Muhtar Kent said at a press conference in New Delhi today.
Kent aims to boost sales in a country where 12 of his products are consumed per person annually, compared with 38 in China, 40 in Kenya and 92 as global average. The Atlanta-based company expects India’s large population of teenagers, increasing urbanization, changing lifestyles and expanding economy to drive demand for its products.
“All of which explains why we believe this business has near limitless growth potential,” said Kent. “India is a wonderfully diverse country. Dynamic, young and emergent.”
Coca-Cola targets India to be among its top five countries by volume from seventh now, according to Kent.
India’s non-alcoholic beverages market is estimated by Euromonitor International to double to 12.9 billion liters in 2015 from 6.2 billion liters in 2010.
Coca-Cola’s subsidiary held a 25 percent share of the non- alcoholic beverages market in India in 2010, ahead of rival PepsiCo Inc. (PEP)’s 20 percent, according to data from Euromonitor. Parle Bisleri Ltd., based in Mumbai, also had a 25 percent market share.
The India investment includes the $2 billion the world’s largest soft-drink maker and its partners announced in November.
Tata Global Beverages Ltd. (TGBL), which sells Tetley Tea and Eight O’Clock coffee, said in February it plans to market a nutrient beverage in India with PepsiCo’s local unit.
Coca-Cola’s India unit sells beverages including Coca-Cola, Diet Coke, Fanta and Sprite, fruit drinks Minute Maid and Maaza, and Kinley bottled water through more than 1.5 million outlets.
The company first began selling its products in the country in 1952, but exited the market in 1977 when government regulations changed and required the company to have a local partner. It returned to India in 1993, after the change in rules allowed a wholly owned subsidiary.
The beverage maker seeks to increase sales in India as part of its so-called 2020 Vision announced in November 2009, according to Kent. The plan entails boosting the company’s annual revenue, including that of its system of global distributors, to $200 billion by the end of the decade.
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