Coke's Indian formula: How Coca-Cola India boss Sanket Ray is rewriting the company's growth story

Stick to your knitting. Add a few frills. And play to your strengths. This, in sum, appears to be the game plan adopted by Sanket Ray, the 49-year-old boss of Coca-Cola India. Ray and his top team are now putting together a sharp-focussed, contra marketing strategy that seeks to ensure that its core strengths are best juiced to ensure maximum growth. Coca-Cola India—which, together with its bottlers, is a Rs 20,000-crore business—is in a sweet spot. In 2022, two of its brands, Thums Up and Sprite, hit the billion-dollar revenue mark, and mango drink Maaza is also well on the way to that milestone. Besides, at a massive 60 per cent share of the Rs 50,000-crore Indian carbonated soft drinks (CSD) market (PepsiCo India is at 30 per cent), the company is well-positioned to capitalise on its strengths. No wonder, then, that Ray jokingly calls his strategy “simple and boring”. But simple can also be successful, and that’s what Ray is aiming for, having taken charge at the beverages giant in January 2021, in the middle of the pandemic.

As Krishna Gopalan delves deep into the Coca-Cola India growth strategy in the cover story, Ray tells him that the plan is to ensure its key brands—that see a sharp decline in winter months—become all-year successes. The idea is to increase the occasions when its brands are consumed and offer more variants. The company decided to hike advertising and marketing spends in the third quarter of calendar year 2022 (typically, it used to increase spends in the second quarter to coincide with the peak season) to ensure strong demand in the festive season. Earlier, in line with its “core strategy”, it also moved out of areas like dairy and water-soluble powders, to focus on getting the most out of its existing strong brands. Leveraging its popular brands, it has also introduced variants like Maaza Aam Panna, Fanta Apple Delite, Limca Sportz and Charged (an energy drink, riding on Thums Up). Retail presence is also being hiked from 2.2 million outlets to 4 million. Remember, unlike arch-rival PepsiCo, Coke does not have a robust snacks portfolio to fall back on when peak season for CSD ends. Hence, the get-more-from-core formula makes eminent sense. In the April-June 2022 quarter, Coca-Cola India saw its best volume performance, clocking a billion incremental transactions. Whether the company can sustain this momentum going forward will be interesting to watch.

Moving away from fizz to the harsh winter faced by India’s start-ups, Binu Paul gets you the story of how venture capitalists are sitting on massive dry powder in terms of funds, but aren’t in any hurry to deploy them just yet. The spate of problems faced by start-ups of late has forced them to be very selective, and they are under no pressure even from their limited partners who want greater due diligence and a reasonable investing pace. But there’s good news, too. International investors remain bullish on the long-term prospects of India. Sooner or later, the fund flows are expected to resume, albeit gradually. On this note, here’s wishing you a very happy, peaceful and prosperous 2023!