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Coca-Cola unit to streamline supply chain; transfers bottling ops in three regions
Re-franchising of bottling operations is focused on streamlining the supply chain in the region and raising the bar on execution.
Hindustan Coca-Cola Beverages Pvt. Ltd (HCCB), a subsidiary of The Coca-Cola Company, on Friday announced the transfer of bottling operations in three territories in north India as the beverage maker moves to streamline supply chains in the region.
As part of the transition, the Rajasthan market will be owned and operated by Kandhari Global Beverages (which comprises Enrich Agro Food Products Pvt. Ltd and Kandhari Beverages Pvt. Ltd). They currently operate in parts of Delhi, Himachal Pradesh, Haryana, Punjab, Chandigarh, Jammu & Kashmir, Ladakh. The Bihar market will be owned and operated by SLMG Beverages Pvt. Ltd, which currently runs bottling operations in Uttarakhand, parts of Uttar Pradesh, Madhya Pradesh, and Bihar. The Northeast market and select areas of West Bengal will be owned and operated by Moon Beverages Pvt. Ltd, which also operates parts of Delhi and Uttar Pradesh.
Re-franchising of bottling operations is focused on streamlining the supply chain in the region and raising the bar on execution, the company said in a statement on Friday.
“This business transfer marks a significant decision for Hindustan Coca-Cola Beverages,” said Juan Pablo Rodriguez, CEO, HCCB India.
“It ensures the right level of investments can be undertaken in all parts of the business, while bringing both scale and contiguity to the business. We are in the long-term growth prospects of our beverages business in India and believe this move will help accelerate the Coca‑Cola system, enabling us to win in the market and provide greater value to local communities,” Rodriguez said.
The announcement follows HCCB’s 2019 divestment in its bottling operations in four territories in north India as it then sought to optimize resources, widen its distribution network, and create regional scale.
Coca-Cola works with bottling partners who manufacture and distribute its beverages in designated markets. In India, it also operates HCCB, the company’s owned bottling business. In all, it works with 11 bottlers that operate 54 bottling plants in the country. HCCB is the largest bottler in India with 16 operational factories. Two factories in West Bengal and another in Bihar will be transferred to third-party bottlers post the transition.
Meanwhile, HCCB is also building several new plants in Telangana and Maharashtra. It recently announced plans to invest ₹3,000 crore in Gujarat to set up a juice and aerated drinks facility.
"We are committed to building stronger and more sustainable local businesses in India,” Sundeep Bajoria, Vice President, India Operations, for Coca‑Cola India, said on Friday.
“As we set ourselves for further growth in the Indian market, these transfers will direct investments into innovation, infrastructure, technical capabilities, talent acquisition and business expansion while strengthening existing capabilities to deliver unparalleled beverage experiences to our consumers,” Bajoria said.
The move comes as the maker of Coke, Sprite, Fanta and Limca drinks continues to ramp up investments in the market.
In March last year, John Murphy, president and chief financial officer at the Coca-Cola Company, said investments were underway in India, along with its bottling partners, as improved infrastructure and rural electrification sparked demand for its beverages.
In a roundtable with the press while on a visit to India, Murphy had indicated that the company will continue to divest its bottling operations in the country over time. “We are on record to say that our aim as a company is to focus on the things that we think we're good at—that is building brands, being a good franchise partner with our bottlers around the world and developing the ecosystem that we are so privileged to be at the centre of. Over the coming years, we will divest—we will do it in a very thoughtful and a very deliberate manner,” he said then.
India is the fifth-largest market for Coca-Cola globally—a market it re-entered in the 90s and where it sells brands such as Thums-Up, Sprite, Fanta and Limca, apart from Coca-Cola or Coke.
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Business NewsCompaniesCoca-Cola unit to streamline supply chain; transfers bottling ops in three regions
First Published:12 Jan 2024, 03:00 PM IST
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