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CHAPTER 1: INTRODUCTION

1.1. COMPANY PROFILE

1.1.1. Coca-Cola, the corporation nourishing the global community with the
world’s largest selling soft drink concentrates since 1886, returned to India in
1993 after a 16 year hiatus, giving new thumbs up to the Indian soft drink market. In
the same year, the Company took over ownership of the nation’s top soft-drink brand
and bottling network. It’s no wonder our brands have assumed an iconic status in the
minds of the world’s consumers.

1.1.2. Ever since, Coca-Cola India has made significant investments to build and
continually consolidate its business in the country, including new production facilities,
waste water treatment plants, distribution systems, and marketing channels.
Coca-Cola India is among the country’s top international investors, having invested
more than US$ 1 billion in India in the first decade, and further pledged another
US$100 million in 2003 for its operations.

The Company has shaken up the Indian carbonated drinks market greatly, giving
consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and
nutrition needs. It has also been instrumental in giving an exponential growth to the
country’s job listings. With virtually all the goods and services required to produce and
market Coca-Cola being made in India, the business system of the Company directly
employs approximately 6,000 people, and indirectly creates employment for more than
125,000 people in related industries through its vast procurement, supply, and
distribution system.

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1.1.3. The Indian operations comprises of 50 bottling operations, 25 owned by the
Company, with another 25 being owned by franchisees. That apart, networks of 21
contract packers manufacture a range of products for the Company.
On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate
the narrow alleyways of Indian cities – constantly keep our brands available in every
nook and corner of the country’s remotest areas.
These are only some of the facts that speak about our commitment to the growth of the
Indian Economy.

1.1.4. General Information

Address: Emkay Towers, Udyog Vihar, Gurgaon, Haryana – 122106


Telephone No. : 91 - 0124 - 2348041 / 2348571
24 Hours Coco Cola Helpline No: 1800 180 2653
Website: www.coca-colaindia.com/index.aspx
President: Mr. Atul Singh

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1.2. About the organization
1.2.1. Coca-Cola was the leading soft drink brand in India until 1977, when it left rather
than reveal its formula to the Government and reduce its equity stake as required under the
Foreign Regulation Act (FERA) which governed the operations of foreign companies in
India. Coca-Cola re-entered the Indian market on 26th October 1993 after a gap of 16 years,
with its launch in Agra. An agreement with the Parle Group gave the Company instant
ownership of the top soft drink brands of the nation. With access to 53 of Parle’s plants and
a well set bottling network, an excellent base for rapid introduction of the Company’s
International brands was formed. The Coca-Cola Company acquired soft drink brands like
Thumps Up, Gold spot, Limca, Maaza, which were floated by Parle, as these products had
achieved a strong consumer base and formed a strong brand image in Indian market during
the re-entry of Coca-Cola in 1993.Thus these products became a part of range of products
of the Coca-Cola Company.

1.2.2. In the new liberalized and deregulated environment in 1993, Coca-Cola made its re-
entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of
the Coca-Cola Company. However, this was based on numerous commitments and
stipulations which the Company agreed to implement in due course. One such major
commitment was that, the Hindustan Coca-Cola Holdings would divest 49% of its
shareholding in favor of resident shareholders by June 2002.

1.2.3. Coca-Cola is made up of 7000 local employees, 500 managers, over 60


manufacturing locations, 27 Company Owned Bottling Operations (COBO), 17 Franchisee
Owned Bottling Operations (FOBO) and a network of 29 Contract Packers that facilitate
the manufacture process of a range of products for the company. It also has a supporting
distribution network consisting of 700,000 retail outlets and 8000 distributors. Almost all
goods and services required to cater to the Indian market are made locally, with help of
technology and skills within the Company. The complexity of the Indian market is
reflected in the distribution fleet which includes different modes of distribution, from 10-
tonne trucks to open-bay three wheelers that can navigate through narrow alleyways of
Indian cities and trademarked tricycles and pushcarts.

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1.2.4. “Think local, act local”, is the mantra that Coca-Cola follows, with punch lines like
“Life ho to aisi” for Urban India and “Thanda Matlab Coca-Cola” for Rural India. This
resulted in a 37% growth rate in rural India visa-vie 24% growth seen in urban India.
Between 2001 and 2003, the per capita consumption of cold drinks doubled due to the
launch of the new packaging of 200 ml returnable glass bottles which were made available
at a price of Rs.5 per bottle. This new market accounted for over 80% of India’s new Coca-
Cola drinkers. At Coca-Cola, they have a long standing belief that everyone who touches
their business should benefit, thereby inducing them to uphold these values, enabling the
Company to achieve success, recognition and loyalty worldwide.

COBO
FOBO
CONTRACT PACKAGING

FIGURE 1: LOCATIONS OF COBO, FOBO & CONTRACT PACKAGING IN INDIA

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1.3 VISION AND MISSION OF COCO COLA

1.3.1 VISION OF COCO-COLA

Our vision serves as the framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth.
1.3.1.1. People: Be a great place to work where people are inspired to be the best they
can be.
1.3.1.2. Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
1.3.1.3. Partners: Nurture a winning network of customers and suppliers, together we
create mutual, enduring value.
1.3.1.4. Planet: Be a responsible citizen that makes a difference by helping build and
support sustainable communities.
1.3.1.5. Profit: Maximize long-term return to shareowners while being mindful of our
overall responsibilities.
1.3.1.6. Productivity: Be a highly effective, lean and fast-moving organization

1.3.2. MISSION OF COCO-COLA

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a
company and serves as the standard against which we weigh our actions and decisions.

1.3.2.1. To refresh the world...

1.3.2.2. To inspire moments of optimism and happiness...

1.3.2.3. To create value and make a difference.

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1.4. PRODUCTS OF COCO-COLA

1.4.1. Coco Cola

Coco Cola was a leading soft drink till 1977 when government policies
necessititated its departure. Coco-Cola made its return to the country in1993 and made
significant investments to ensure that the beverage is available to more and more
people even in the remote and inaccessible part of the nation. In 2002 Coco-Cola
launched it iconic campaign “Thanda Matlab Coco-Cola” which sky-rocketed the
brand to make it India’s favorite soft-drink brand.In 2003, coke was make available for
just Rs. 5 across the country and this pricing initiative together with enhanced
distribution ensured that all brands in the portfolio grew exponentially. Coco cola had
signed various celebrities such has Karishma Kapoor, Aamir Khan, Sourav Ganguly,
Srinath

Table 1: Table showing availability of Coco-Cola

GLASS PET CAN FOUNTAIN


200ml,300ml, 500ml,1.5l, 330ml Various Sizes
2L, 2.25L,
500ml,1000ml 500ml+
100ml

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1.4.2. Thums Up

Thums Up is a leading soft drink and most trusted brand in India.


Originally introduced in 1977, Thums Up was acquired by Coco Cola Company in
1993.It is known for its strong, fizzy taste and its confident, mature and uniquely
masculine attitude. This brand clearly seeks to separate the men from the boys.

Table 2: Table showing availability of Thums Up

GLASS PET CAN FOUNTAIN


200ml,300ml, 500ml,1.5l, 330ml Various Sizes
2L, 2.25L,
500ml,1000ml 500ml+
100ml

1.4.3.Sprite

Sprite a global leader in the lemon lime category is the second largest
sparkling beverage brand in India. Launched in 1999, with its cut-through perspective
has managed to be a true teen icon.

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Table 3: Table showing availability of Sprite

RGB PET CAN FOUNTAIN


200ml,300ml 500ml,600 ml, 330ml Various Sizes
1250ml,1500ml,
2000ml, 2250ml

1.4.4. Fanta

Fanta entered the Indian market in the year 1993.Perceived as a fun


youth brand, Fanta stands for its vibrant color, tempting taste and tingling bubbles that not
just uplift feeling but also helps free spirit thus encouraging one to indulge in the moment.
This positive imagery is associated with happy, cheerful and special times with friend.

Table 4: Table showing availability of Fanta

GLASS PET CAN FOUNTAIN


200ml,300ml 500ml,1.5l, 330ml Various Sizes
2L, 2.25L,
500ml+
100ml

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1.4.5. Lime ‘n’ Lemoni Limca

Lime ‘n’ Lemoni Limca can cast a tangy refreshing spell to


anyone, anywhere. Limca has lived up to its promise of refreshment and has been an
original thirst choice of millions of consumers for over 3 decades. Born in 1971, Limca has
retained unchallenged as the number one sparkling drink in the cloudy lemon segment. The
success formula is the sharp fizz and Lemoni bite combined with the single minded
proposition of the brand as the provider of “Freshness”.

Table 5: Table showing availability of Lime ‘n’ Lemoni Limca

GLASS PET CAN FOUNTAIN


200ml,300ml 500ml,1.5l, 330ml Various Sizes
2L, 2.25L,
500ml+
100ml

1.4.6. Minute Maid Pulpy Orange

The history goes as far back as 1945 when the Florida Food Corporation
developed orange juice powder. The company developed the process that eliminated 80%
of the water in orange juice, forming a frozen concentrates that when reconstituted created

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orange juice. They branded it a Minute Maid, a name connoting the convenience and the
ease of preparation9in a minute).

Available in 3 Pet Pack sizes: 400mL, 1 Litres and 1.25 Litres.

1.4.7. Maaza

Mango-the fruit associated with good time like no other. Aptly called the
king of fruit, bottled. This is what Maaza is all about. Introduced in the late 1970s, Maaza
has come to symbolize the very spirit of mangoes. Universally loved for its taste, color,
thickness and wholesome properties, Maaza is the mango lover’s first choice.

Table6: table showing availability and prices of Maaza

PET 1.2 PET 600 ml 200ml RGB 250ml RGB 250ml PET Pocket
Litres Maaza
200ml
Rs.45 Rs.25 Rs.8 Rs.10 Rs15 Rs15

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1.4.8. Kinley

Water, a thirst quencher that refreshes, alife giving force


that washes all the toxins away. A ritual purifier that cleanses, purifies, transforms. The
most basic need of life, the very sustenance of life a celebration of life itself

Available in PET Packed bottles: 500ml and 1000 ml

1.3.9. Georgia Gold

In 2004, Georgia Gold was launched in India to cater to the


increasing demand for quality tea and coffee. Take a break for Georgia Gold’s freshly
ground Cappuccino, or indulge senses with rich chocolate. Catch up with friends over a
chilled cup of Georgia Gold iced tea or cold coffee.

Hot Beverages: Coffee, Tea and Hot Chocolate

Cold Beverages: Iced tea and Cold Coffee

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1.5. FUNCTIONAL AREAS OF COCO-COLA

The main functional areas of Coco cola India are as follows:

1.5.1. Manufacturing Department: It situated at Bidadi, is the third largest plant and one
of the bottling operations owned by the company. The Plant has one PET line which has
the capacity of yielding 209 bottles, per minute, two RGB (Returnable glass bottles) lines
which yields 600 bottles per minute each and one Juice line which yield 155 bottles per
minute. It caters to the whole of South Karnataka through a network of more than 80
distributors. There are three depots in Bangalore; North Depot, East Depot and Mega
Depot.

1.5.2. Distribution Department: It has a wide and well managed network of salesmen
appointed for taking up the responsibility of distribution of products to diverse parts of the
cities. The distribution channels are constructed in such a way that the demand of
customers is fulfilled at the right place and the right time when it is needed by them.
A typical distribution chain in this organization would be:
Production --- Plant Warehouse --- Depot Warehouse --- Distribution Warehouse ---
Retail Stock --- Retail Shelf --- Consumer
The customers of the Company are divided into different categories and different routes,
and every salesman is assigned to one particular route, which is to be followed by him on a
daily basis. A detailed and well organized distribution system contributes to the efficiency
of the salesmen. It also leads to low costs, higher sales and higher efficiency thereby
leading to higher profits to the firm. The distribution system is as follows:
1.5.2.1. Direct distribution: In direct distribution, the bottling unit or the bottler partner
has direct control over the activities of sales, delivery, and merchandising and local account
management at the store level.
1.5.2.2. Indirect distribution: In indirect distribution, an organization which is not part of
the Coca-Cola system has control on one or more of the distribution elements (Sales,
delivery, merchandising and local account management)
1.5.2.3. Merchandising: Merchandising means communication with the consumer at the
point of purchase to convey product benefit, value and Quality. Sales people and delivery

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personnel both have this responsibility. In certain locations special teams who go into
business locations to specifically merchandise our products.

1.5.3. Finance Department: It checks credit limits and approves sales orders in
compliance with the credit policy followed by the firm, records collections from
distributors, periodically reconciles outstanding balances from distributors, obtains balance
confirmation from distributors and follows up outstanding balances.

1.5.4. Shipping or Warehousing Department: It dispatches goods as per approved by


order, ensures that stocks are dispatched on a FIFO basis, ensures physical control over
load out area and updates warehouse stock records in a timely manner.

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1.6 SIZE IN TERMS OF MANPOWER AND TURNOVER OF COCO-
COLA

1.6.1. Coke is it -- it being the world's #1 soft-


drink company. The Coca-Cola Company
(TCCC) owns four of the top five soft-drink
brands (Coca-Cola, Diet Coke, Fanta, and
Sprite). Its other brands include Minute Maid,
PowerAde, and Dasani water. In North America
it sells Group Danone's Evian; it also sells
brands from Dr Pepper Snapple Group (Crush,
Dr Pepper, and Schweppes) outside Australia, Europe, and North America. The firm makes
or licenses more than 3,000 drinks in some 200 nations. It owns 32% of Mexico's bottler
Coca-Cola FEMSA and 23% of European bottler Coca-Cola Hellenic Bottling. In late 2010
TCCC bought out its leading bottler, Coca-Cola Enterprises (CCE), and renamed it Coca-
Cola Refreshments USA.

Key number for fiscal


Chief year ending
Executive December 2010
Officer

1.6.1.1. Sales: $35,119.0M

1.6.1.2. One Year Growth: 13.3%


Vice President Supply Chain
1.6.1.3. Net Income: $11,809.0M

1.6.1.4. Income Growth: 73.1%


Chief Finance Officer

Human Resource Director

Vice President BSG

1.7. ORGANIZATION STRUCTURE OF COCO-COLA INDIA

Regional Vice President (North)

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Regional Vice President (Central)
Region Vice
President

AGM/AOD
Unit 1

AGM/AOD
Unit 2

AGM/AOD
Unit 3

AGM/AOD
Unit4

Region Finance

Region Human
Resource

Region Customer
Service

Region External Affairs

Region Cold Drink

Region Legal

Region BSG

Region
Director/Manager
15 Market Execution
Region Capability
Region Channel
Management
FIGURE 2: ORGANIZATION STRUCTURE IN COCA-COLA, INDIA

1.8. MARKET SHARE AND POSITION OF COCO-COLA

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1.8.1.Established in 1886, Coca-Cola is the world’s most ubiquitous brand. The company
and its subsidiaries are present in over 200 countries employing over 49,000 individuals
and generating revenues to the tune of US$ 21 billion. The Coca-Cola Company markets
four of the world’s top-five soft drink brands; its beverage products encompass nearly 400
brands, including non-carbonated beverages such as waters, juices, sports drinks, teas and
coffees. The company’s net income registered a CAGR of 7.2 per cent over a 10-year
period. Till date, Coca-Cola has invested over US$ 1 billion in India and employs over
5,000 people. The Coca- Cola system in India comprises 25 wholly owned bottling
operations and another 35 franchisee-owned bottling operations. A network of 27 contract-
packers also manufactures a range of products for the country. Coca-Cola is a leading
player in the Indian beverage market with a 60 per cent share in the carbonated soft drinks
segment, 36 per cent share in fruit drinks segment and 33 per cent share in the packaged
water segment. In 2004, Coca-Cola sold 7 billion packs of its brands to more than 230
million consumers across 4,700 towns and 175,000 villages. The company has doubled its
volumes and trebled its profits between 2001 and 2004. Coca-Cola continues to re-affirm
its commitment to India through active ‘Citizenship Efforts.” All its plants
in India partner with local NGOs to alleviate local community issues in numerous small
ways. It boasts of impeccable credentials on quality

1.8.2.Coke is it -- it being the world's #1 soft-drink company. The Coca-Cola Company


(TCCC) owns four of the top five soft-drink brands (Coca-Cola, Diet Coke, Fanta, and
Sprite). Its other brands include Minute Maid, PowerAde, and Dasani water. In North
America it sells Group Danone's Evian; it also sells brands from Dr Pepper Snapple Group
(Crush, Dr Pepper, and Schweppes) outside Australia, Europe, and North America. The
firm makes or licenses more than 3,000 drinks in some 200 nations. It owns 32% of
Mexico's bottler Coca-Cola FEMSA and 23% of European bottler Coca-Cola Hellenic
Bottling. In late 2010 TCCC bought out its leading bottler, Coca-Cola Enterprises (CCE),
and renamed it Coca-Cola Refreshments USA.

1.8.3.Exploiting economies of scale and its bargaining power (on account of bulk
purchases) in the country, Coca- Cola India has facilitated exports of commodities and
materials like tea, coffee, PET resin, performs, closures, crowns and labels Coca-Cola
continues its efforts at increasing the percapita consumption of its beverages in the country.
India PCC currently is at 11 Servings a Year (up from7 in 2001). This requires a
comprehensive activation of the Indian market by addressing acceptability, affordability
and availability of its products The Company continues to build on its foundations in India.
While it continues to maximize its carbonated soft drink potential through various pack,
pricing, occasion-based strategies across town-classes in India. it is exploring other
categories like juice, water and tea and coffee. It is poised to lead the beverage revolution
in India.

Coca-Cola, India: AT A GLANCE

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1.8.3.1.200 countries. 49,000 employees. 400 brands. 4 out of the world’s top 5 soft drink
brands. US$ 21 billion revenues

1.8.3.2. India: Investment of US$ 1 billion. 5,000 employees. 25 wholly-owned, 35


franchisee owned bottling operations. 27 contract packers

1.8.3.3.“Citizenship Efforts” in tandem with local NGOs to alleviate community issues in


theareas of its bottling plants

1.8.3.4.Factors for success: Diverse product portfolio. Brand building. Affordable entry
price point. Strong brand pull. Ultra low cost model. Minimized internal capital
requirements

1.8.3.5. For Coca-Cola, India is: Sourcing base for various commodities. Huge market.

1.8.3.6. Future plans, India: Increasing per capita consumption of beverages. Expanding
distribution networks.

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