Coca-Cola to procure more fruits from India, Asim Parekh to head new division
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New Delhi: American beverages company Coca-Cola Co. is planning to procure more fruits from India in the coming years to cater to its global requirement of ingredients.
The company has created a new position to focus on fruit producers. Asim Parekh, who was the vice president (strategy and planning), will become the vice president (fruit circular economy) for Coca-Cola’s India and South West Asia business unit, with immediate effect.
Parekh’s appointment comes two weeks after the company appointed T. Krishnakumar as president of Coca-Cola India and South West Asia, replacing Venkatesh Kini. The business unit includes markets like India, Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives.
With the new initiative – which Coca-Cola calls ‘Circular Economy’ – the American soft drinks maker will be involved in the entire sourcing supply chain of fruits. “We will be making interventions across the value chain starting from the farm-gate,” Coca-Cola said in a statement.
Parekh will be “driving the critical task of connecting the end-to-end value chain from farmer to grocer”, the company said.
Coca-Cola needs fruits for its non-cola beverages and had also started mixing fruit content to some of its carbonated beverages in 2015. In India, non-carbonated beverages make up for about 35-40% of Coca-Cola’s annual revenue which the company wants to increase in future.
Besides feeding its demand in India, Coca-Cola and its vendors export fruit to other Coca-Cola units worldwide. Export to Coca-Cola operations globally is estimated at Rs1,700 crore annually, the company said.
“The Coca-Cola India system is already one of the largest institutional buyers of agriculture produce in India with over 95% of its ingredients sourced locally,” the company added.
At present, Coca-Cola procures more than 2 lakh tonnes of fruit from Indian farmers every year. Just for Maaza, its mango-based beverage, Coca-Cola sources about 70,000 tonnes of mangoes from about 50,000 farmers. With the target to double production, Coca-Cola will source about 14,000 tonnes of mangoes from 100,000 farmers. However, the company does not source mangoes directly from the farmers. It has a few vendors who also supply to Coca-Cola units in other countries. Jain Irrigation Systems Ltd, one of its vendors, supplies about 56-60% of mango pulp that Coca-Cola India needs for producing Maaza.
Globally, Coca-Cola has announced plans to build a “total beverages portfolio” tapping “emerging trends”.
The company which announced its plans to invest $5 billion by 2020 for capacity enhancement and market development in 2010, has been working on mixing more fruit content in some of its carbonated beverages after Prime Minister Narendra Modi, in September 2014, urged multinational cola makers to add fruit content in aerated beverages in a bid to boost fruit sales of Indian farmers.