Coca-Cola earns $290 mn from India by divesting its bottling operations in Jan-Mar

Global soft drinks major the Coca-Cola Company has earned USD 290 million (around Rs 2,420 crore) from India in the March quarter by refranchising its bottling operations to its existing bottlers in three key markets here. HCCB, Coca-Cola’s bottling arm in India, had in January this year announced to divest company-owned bottling operations in Rajasthan, Bihar, Northeast, and parts of West Bengal to its existing bottlers.
“During the three months ended March 29, 2024, the company recorded net gains of USD 599 million and USD 293 million related to the refranchising of our bottling operations in the Philippines and in certain territories in India, respectively,” said Coca-Cola in its earning statement on Tuesday.

India is the fifth largest market of the Atlanta-based company, which operates here with brands as Coca-Cola, Coke, Thums UP, Maaza, Sprite, Fanta, Minute Maid, etc.

Hindustan Coca-Cola Beverages (HCCB) had transferred bottling operations to its existing partners in these three regions — Kandhari Global Beverages, SLMG Beverages and Moon Beverages — respectively.

This was part of Coca-Cola’s plans to divest assets globally by franchising regional operations to local partners.

In the first quarter of 2024, the Coca-Cola company witnessed “growth” in Unit case volume in the India market, it said. However, in the Asia Pacific market zone, under which India falls, unit case volume has declined 2 per cent in the first quarter on account of decline in water, sports, coffee, and tea. “Growth in the Philippines, India, Vietnam, and Indonesia was more than offset by a decline in China,” said the statement.

Globally, the Coca-Cola company’s unit case volume grew 1 per cent in 2024.

Unit case volume means the number of unit cases of company beverages directly or indirectly sold by the company and its bottling partners to customers.

The Coca-Cola Company’s net revenue for the March quarter grew 2.9 per cent to USD 11.3 billion, and organic revenues (non-GAAP) grew 11 per cent.

Coca-Cola Company Chairman and CEO James Quincey said, “We are encouraged by our start to 2024, delivering another quarter of volume, topline and earnings growth amidst a dynamic backdrop.”

On the outlook, the company said it “expects to deliver organic revenue (non-GAAP) growth of 8-9 per cent, which consists of operating performance at the high end of the company’s long-term growth model and the anticipated pricing impact of a number of markets experiencing intense inflation”.