Company Trend Analysis - Coca-Cola Adopting Mass Market Strategy For Rural Majority - NOV 2017


BMI View: Coca-Cola is focusing its attention on India, which it hopes will become its third largest market in the world in terms of revenue generation, through a USD5bn investment. To push expansion deeper into the Indian market, Coca-Cola will focus on mass-market affordability and smaller product sizes.

Coca-Cola is looking to invest USD5bn in India by 2020, with the aim of turning the country into its third largest market in the world in terms of revenue generation. India currently ranks as the company's sixth largest market, behind the US, Mexico, China, Brazil and Japan but Coca-Cola sees strong growth potential in the market. Coca-Cola's expansion plans in India will move the company away from carbonated drinks and into healthier alternatives like fruit juices, dairy products and hot drinks, such as coffee and tea. The company also hopes to have a 50:50 split between sparkling and non-sparkling drinks by 2025 or 2030.

Coca-Cola's focus in the Asia Pacific region comes on the back of a 3% growth in concentrate sales in 2016, the highest out of the four operating regions (Europe, Middle East and Africa, Latin America, North America and Asia Pacific) covered by Coca-Cola. In particular, the company has been performing strongly in the still beverage category with growth of 5% y-o-y in Asia Pacific, comprising of packaged water, teas and coffee, juices and juice drinks. India has been a key market of focus for Coca-Cola, with an annual growth of 3% in unit case volume in FY2016 and 4% growth in FY2015.

Asia-Pacific Strongest Market For Coca-Cola
Sales Growth %, y-o-y
Source: Company Filings, BMI

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