INDIA – The Coca-Cola Company has announced an internal realignment of its bottling operations in North India, as the beverage giant moves to build a stronger and more sustainable local business.
Under the new operation model, Hindustan Coca-Cola Beverages Pvt. Ltd (HCCB) – the company-owned bottler for the majority of India will transfer its business operations in four territories in North India to existing bottlers.
The change involves four non-contiguous territories in which HCCB currently operates, a move which Coca-Cola said is designed to build regional scale, stimulate investments and growth in the northern part of the country.
“This move will deliver sustainable growth and will create shared value for bottlers, customers, consumers and communities,” Coca-Cola said in a statement.
“This realignment optimizes existing capacities, supply chain, brings further investments and improves distribution routes through contiguous territories.”
According to an India Times update, the majority bottling operations have been brought by diversified entrepreneur Sanjeev Agrawal-promoted MMG Group, which owns Moon Beverages.
In addition, The Ladhani brothers have jointly acquired HCCB’s bottling territories operations in eastern Uttar Pradesh, while a smaller territory has been acquired by the Kandhari Group.
Coca-Cola’s bottling network in India currently comprises 14 bottlers including HCCB. HCCB will continue to operate in East, West and South of India.
The move to refranchise bottling operations is in line with Coca-Cola’s global strategy to divest asset-heavy operations, and reduce fixed costs, leading to higher profitability. The company said that it does not intend to make further immediate realignment.
In June this year, Coca-Cola had named a new head for M&A and new ventures—the first such vertical in India to focus on acquisitions and divestments.
During the July-September 2019 quarter, the Coca-Cola said better growth in its packaged water business in India contributed to global business.
It also said expansion of its premium water business in India under the
Smartwater franchise had grown ‘successfully’ and become the second-largest
premium water brand in the market. India
is now the fourth-largest market globally for Smartwater.