Coca-Cola India sees double-digit volume growth in Q2
The big swing in Asia Pacific has been driven by the bounce back of India, said CEO James Quincey during the earnings call
The Coca-Cola company announced its quarterly results on Tuesday, for the period ending June 28, 2024.
The unit case volume for the beverage brand grew 3%, driven by growth in sparkling flavours and trademark Coca-Cola in APAC. Specifically, the growth was led by India and the Philippines.
The company also incurred USD 7 million (Rs 58.5 crores) of transaction costs globally related to the re-franchising of their bottling operations in certain territories in India.
In the APAC region, the operating income declined 4%, which included items impacting comparability and a 7-point currency headwind. The comparable currency neutral operating income declined 2%, as organic revenue growth was more than offset by an increase in marketing investments and higher input costs.
In the earnings call, James Quincey, chief executive officer, Coca-Cola Company said, “Our business in India recovered nicely from a slower start to the year, driven by Sprite and Fanta, as well as strong local brands such as Thumbs Up and Maaza. Strong end-to-end execution across our growth flywheel led to double-digit volume growth.”
The India operations required some stocking up to anticipate future demand. Clearly, the big swing in Asia Pacific is driven by the bounce back of India, he added.
In the first quarter, India had a soft performance but the second quarter was very strong. And so that produced a big swing in the results.
Quincy added, “India had a good double-digit growth volume in the second quarter. We are still very bullish on India, yet very realistic in terms as it won't be a straight line into the future. But they certainly had good results in the second quarter.
At an overall level, the brand is going to continue to press ahead with the marketing, innovation, the price factor and the execution since that's the way to earn the right to take a reasonable level of pricing, according to him.
“Clearly, some of the inflationary and the mix effects are likely to become more subdued as we go into the back half of the year,” he shared.
In India, the company is leveraging packaging innovation by utilizing an ultra-lightweight affordable bottle with an extended shelf life, allowing beverages to be transported farther to reach more consumers and reducing costs. The package is now available in over half of India’s commercial beverage outlets and has added more than 400 million transactions in the first half of the year.
