Coca-Cola consolidates bottling operations in India

In a bid to streamline its bottling operations in India, Coca-Cola is restructuring its organisational set-up. Under the new structure, the firm’s bottling units in the country will be supervised by a senior vice-president, unlike its existing set-up in which two executives head the company-owned bottling operations and franchise-operated bottling operations, respectively. This will help it capture avenues of growth such as e-commerce, modern trade, new beverages and digitisation in the country, Coca-Cola India said in a statement.

The move comes when the firm is undergoing a reorganisation, which involves transferring key officials of operations and finance, shutting down bolting units and revamping its product portfolio. The new structure will become effective this month and is aimed at increasing productivity, reducing duplication and injecting better cost-efficiency in the firm, which has posted subdued growth in the past two years.

Coca-Cola sources its beverages from 54 bottling units in the country. Of those 24 are owned by Hindustan Coca-Cola Beverages (HCCB), a subsidiary of its international bottling arm Bottling Investment Group (BIG). Currently, HCCB bottles 65 per cent of its beverages. Some 13 franchise bottlers, which produce and distribute Coca-Cola’s products in India, account for the rest.

Shehnaz Gill, who was vice-president (VP) and general manager at Coca-Cola Refreshments in the United States, will over as senior vice-president, operations (India), a new office. He will supervise HCCB and 13 franchise bottlers in the country. Gill, a Coca-Cola veteran, joined the company as general manager, sales, in 2005 after working for Asian Paints and Sify in India.

The firm has repositioned the head of its company-owned bottling operations, Sumanta Datta, and the chief of its franchise-operated bottling operations, Bhupendra Suri. While Suri is relocating to Nigeria, Datta has been made vice-president of South-West Asia (Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives).

During the past three years, Coca-Cola has faced hurdles in its bottling operations here. Bottling units in Uttar Pradesh, Andhra Pradesh, Rajasthan and Meghalaya had to be shut owing to low demand and the depletion of groundwater tables. During the peak summer months of 2015 and 2016, its sales growth was poor. As health concerns over sugary carbonated drinks led to low demand, Coca-Cola diversified its portfolio by introducing non-carbonated beverages.

“The franchise management function of Coca-Cola India has been organised for geographical synergies instead of bottling territories. Now that we have built a solid foundation for our business over the last two decades, we are ready to embrace India as one national market with common commercial metrics, marketing calendars and market execution standards” said Venkatesh Kini, president, Coca-Cola India and South-West Asia.