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Coca-Cola lost market share in India in the second quarter, CFO John Murphy said on Tuesday, as the company grapples with high costs for aluminium and tries to plug packaging gaps for mid-tier price points.
After the US-Israeli war on Iran sparked a Diet Coke shortage in India as aluminium can supply was squeezed and a subsequent wave of ”Diet Coke parties” boosted demand, Coca-Cola has raised prices across India and is sourcing larger-sized cans from Southeast Asia, sources have told Reuters.
Coca-Cola reported strong quarterly earnings on Tuesday and raised its annual forecasts, led by successful advertising campaigns around its World Cup sponsorship, but India was a weak spot, with falling market share dragging down results in the company’s Asia Pacific region.
”Last year was a difficult year for the industry (in India) and we’re seeing the industry bounce back this year,” CFO John Murphy told Reuters in an interview, adding that it would be true to say that Coca-Cola has lost market share this past quarter.
”Right now, the mid-tier (price pack of between 11 to 40 Indian rupees) is one where we do not yet have the pack price architecture that we need. We’re working on that. And so I expect that over time we’ll recover some of the share losses,” Murphy said.
Aluminium and PET plastic prices have increased more this year than Coca-Cola had anticipated, Murphy said, and the company is working to offset those price pressures.
Murphy said he was bullish on the Indian market and described the Diet Coke issue of increased demand as a ”wonderful problem to have”.
”I think we’ll end up this year with an order of a 10x increase — off a very small base I might add — but a 10x increase in demand for the brand.”
Also Read: Sanofi Consumer Healthcare India Q2 profit rises 13% as margins expand on domestic sales growth
After the US-Israeli war on Iran sparked a Diet Coke shortage in India as aluminium can supply was squeezed and a subsequent wave of ”Diet Coke parties” boosted demand, Coca-Cola has raised prices across India and is sourcing larger-sized cans from Southeast Asia, sources have told Reuters.
Coca-Cola reported strong quarterly earnings on Tuesday and raised its annual forecasts, led by successful advertising campaigns around its World Cup sponsorship, but India was a weak spot, with falling market share dragging down results in the company’s Asia Pacific region.
”Last year was a difficult year for the industry (in India) and we’re seeing the industry bounce back this year,” CFO John Murphy told Reuters in an interview, adding that it would be true to say that Coca-Cola has lost market share this past quarter.
”Right now, the mid-tier (price pack of between 11 to 40 Indian rupees) is one where we do not yet have the pack price architecture that we need. We’re working on that. And so I expect that over time we’ll recover some of the share losses,” Murphy said.
Aluminium and PET plastic prices have increased more this year than Coca-Cola had anticipated, Murphy said, and the company is working to offset those price pressures.
Murphy said he was bullish on the Indian market and described the Diet Coke issue of increased demand as a ”wonderful problem to have”.
”I think we’ll end up this year with an order of a 10x increase — off a very small base I might add — but a 10x increase in demand for the brand.”
Also Read: Sanofi Consumer Healthcare India Q2 profit rises 13% as margins expand on domestic sales growth
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