Coca-Cola’s India unit and South West Asia business operations comprise key markets – India, Nepal, Bhutan, Bangladesh, Sri Lanka and Maldives. Nepal is one of the key markets for Coca-Cola and the business unit’s role is critical to the company to maintain its market share and brand name. Recently, Neeraj Garg, vice president at Coca-cola India and South West Asia Business Unit visited Nepal. New Business Age Editor-in-chief Madan Lamsal talked with him regarding business prospects of Coca-Cola in Nepali market during his visit.
Kindly talk about your career growth and your role in the Coca Cola business today.
I have spent most of my working life with Coca-Cola, having been with the company for almost two decades now. I joined in 1994 and worked in a variety of roles mostly involving Operations and Commercial beverages. I had an eight year stint with Coca-Cola China where I worked on a variety of roles from Business Development to Shanghai Region Manager and also managed The Coca-Cola Company’s Global Partnership for the 2010 World Expo in Shanghai. I moved back to India in early 2011 as VP-Operations providing leadership support to the company owned bottling operations (CBO) and franchise bottling operations (FBO’s) in India. In October 2012, I took over the role of VP-South West Asia Operations and as the Head of our Juice business for the India and South West Asia Business Unit.
Coca-Cola is a great company and a great brand to work for. I’ve had some extremely challenging yet fantastic experiences in my years with Coke. I have had the pleasure of working with some of the most engaged and inspiring people as a part of the Coca-Cola family and I hope I can continue to do so in the future as well.
Till a few years ago Coke in Nepal enjoyed close to 80 percent of market share. That is now reduced about 64 percent only, somewhat due to aggressive marketing from the competitor. What is being planned in order for Coke to regain the same past glory? Where have you reached in your expansion plan for Coca-Cola in Nepal?
The Coca-Cola Company is one of the largest beverages companies and our products are available in more than 200 countries. In Nepal as well, our brands enjoy consumer preference and share of throat, as we like to call it.
After 126 years in the beverage business, we are still innovating, evolving and striving to be relevant to new generations. We constantly strive to stay relevant to our consumers by focusing on their needs and consumption patterns and connecting with them through our products. For example, Trademark Coca-Cola has partnered with the All Nepal Football Association for the Coca-Cola Cup to connect with young footballers across Nepal and promote healthy active lifestyles. Brand Fanta has partnered with the Miss Nepal pageant to stay relevant to teenagers and add some ‘play’ in their lives. So we are constantly trying to find touch points that connect our brands with our consumers across the country.
We face aggressive competition in any country that we operate in, but this is good since it not only helps the category to grow, but also provides consumers with a choice of high quality beverages.
Providing consumers with choice and value continues to be the cornerstone of our business strategy.We are focused on offering a range of products in different packs at varying price points, which is in keeping with our OBPPC (occasion, brand, price, pack, and channel) architecture. To ensure this, we are investing in our distribution, innovation and marketing investments to continue to drive recruitment for the beverage category. Further improvement in the company’s route-to-market and organizational capabilities are also areas we need to focus on. We have solid plans for Nepal this year and if we can do the right things every day, business growth is a given.
Coca-Cola in Nepal does not have a wide range of products that the company’s consumers enjoy elsewhere. What are you doing in this regard? Is any products line expansion in the offing in Nepal?
The Coca-Cola Company is one of the largest beverages companies in the world today. We are available in more than 200 countries across the world and have more than 3500 product offerings, including more than 800 low and no calorie products, for our consumers to choose from.
Our efforts in Nepal need to be directed at being the beverage of choice all day, every day. We need to continue to do the right things each day and at all times.We want to provide our consumers across Nepal with a wide variety of products. We currently offer Trademark Coca-Cola, Diet Coke, Fanta, Sprite and Kinley Soda in Nepal in a variety of pack sizes across channels. We are focused on leveraging the growth opportunity that a market like Nepal provides and we are constantly researching and evaluating need states to grow our business and expand our portfolio of products.
We have been researching and innovating and have a number of plans for Nepal this year in terms of our beverage choices and packaging varieties. You will have to watch out for those in the coming months!
What is the contribution of Coca-Cola’s pure juice and juice products to its total annual revenue collection from Nepal?
We currently offer Trademark Coca-Cola, Diet Coke, Fanta, Sprite and Kinley Soda in Nepal in a variety of pack sizes including in RGB 250ml, Cans 330 ml, PET 500ml, 1.5 Liters and 2.25 Liters. Our current portfolio does not include juices and juice products. As I said before, we are focusing on our distribution, route-to-market and organizational capabilities to drive recruitment for the beverage category, grow our business and expand our portfolio of products, in line with consumer choice and preference.
Coca-Cola’s fruit juice and juice products like the Minute-Maid and Simply Orange apparently do not have any significant market share in the Nepali market. What are the plans to promote these juice products of the company in Nepal?
As I mentioned earlier, we currently do not manufacture any juice in Nepal.We offer Trademark Coca-Cola, Diet Coke, Fanta, Sprite and Kinley Soda in Nepal in a variety of pack sizes. Packaged beverage consumption is on the rise in Nepal and we are constantly evaluating opportunities to provide our consumers with a variety of still and sparkling beverages.We need to continue to do the right things each day and at all times, to further grow the packaged ready to drink beverage business in the country. We will of course continue to innovate and evolve our portfolio of products to cater to consumers’ tastes in the Nepalese market.
There is one controversy in Nepal. People say that the Coke they get to drink here in Nepal or this part of the world is not the same as what the people in the US or Europe get to drink. Is the perception right? If there is perceptive difference, why so and do you find reasons enough to alter this perception? How?
Our beverages across the world provide consumers with the same great taste and quality. We strive toprovide the same high quality, safe and tasty products in all 200+ countries in which we operate. Our quality testing parameters and taste standards apply to all our manufacturing facilities worldwide. We aim to provide our consumers the same refreshing and flavourful beverages across the world.
Coke is no doubt the most popular carbonated drinks in Nepal as well as in the South Asian region. But perhaps the same is not true for Coke’s juices. How far is Coca-Cola from realizing the optimum potential of its juice business in the South Asianregion?
Nepal’s beverage industry is growing. Consumers now have a lot of choice in terms of choosing what type of beverage they want, at what pack and what occasion.
That being said, the industry still has a lot of potential to grow. This is a country which has a relatively low per capita consumption levels for packaged beverages and we see steady and robust growth in both sparkling and still beverage categories in the future. The per capita consumption of our products is only 9.2. Contrast this to a global average of 92, 38 in China and 728 in Mexico. In Nepal our portfolio includes Trademark Coca-Cola, Diet Coke, Fanta, Sprite and Kinley Soda. In India we have products like Thums Up and Limca and the Minute Maid Brand of juices.
Minute Maid Pulpy Orange is the number one orange juice drink and Maaza, our mango juice drink has been the leader in the mango juice category for years now. In Sri Lanka as well, we have our Minute Maid range of juices, including Orange, Mango, Apple and Mixed Fruit flavours which are doing exceptionally well in that market. We are currently the market leaders in Sri Lanka. So we are seeing a rise in the consumption of juice and juice drinks in all our markets in this region. Our outlook towards juices and juice based beverages in this region is very positive. With disposable incomes rising, consumers are focusing on hygiene and quality of packaged beverages which will lead to growth in consumption of our juice drinks as well.
The company’s other beverages such asLimca, ThumsUp, Maaza etc.are quite popular in India but not that much in Nepal. Is the company going to adopt any new marketing strategy in order to promote these brands in Nepal?
Our efforts in Nepal need to be directed at being the beverage of choice all day, every day.We want to provide our consumers across Nepal with a wide variety of products and we have been investing behind our brands and brand positioning to drive recruitment for the sparkling beverage category. We currently offer Trademark Coca-Cola, Diet Coke, Fanta, Sprite and Kinley Soda in Nepal in a variety of pack sizes. We are focused on leveraging the growth opportunity that a market like Nepal provides. We have some solid marketing plans for Nepal this year and we will continue to innovate and evolve our portfolio of products to cater to consumers’ taste preferences in Nepal.
Is the company planning to promote its juice brands in a major way globally as it seems the consumers, of not only Coke but also other carbonated drinks as well, seem to gradually believe that soda is not very god for human health and hence are shifting to juices which are healthier alternatives?
All over the world, consumers are telling us they care about their well-being, and we care too. We recognize the health of our business is interwoven with the well-being of our consumers, our employees and the communities in which we operate. That is why we offer consumers a wide range of choices in products, sizes and with and without calories. Bringing real choice to consumers everywhere, and educating them on the role their choices play in achieving sensible, balanced diets and active, healthy lifestyles, is part of our commitment to responsible marketing and consumer education around our products.
As I said before, we have more than 3500 product offerings, which include more than 800 low and no calorie products, for our consumers to choose from. We have demonstrated that both the Sparkling and Still segments have tremendous upside. We want to be a total beverage company and keeping this in mind have launched several products in the recent past to ensure we are able to cater to the varying needs of the consumer. Juices and juice drinks play a key role in our portfolio and have been showing robust growth over the past few years. All our products, not just juice drinks, can be enjoyed as part of an active healthy lifestyle.
In recent years, Coke in Nepal is increasing its spend on CSR activities. What new activities are being planned?
We operate in world which is constantly innovating and evolving to become more and more sustainable in the long term. Consumers across the world are conscious to companies that are investing in CSR and are seen doing something for the betterment of the community.
Sustainability is a crucial component of The Coca-Cola Company’s global business strategy and Vision 2020 statement. We strongly believe that in order for us to do well, we need our communities to succeed and give us the social license to operate. As our Chairman Muhtar Kent puts it- ‘Sustainable business thrives only amongst sustainable communities.’ We have developed a global framework for all our sustainability initiatives across the world and have an entire vertical dedicated to CSR and sustainability.
In Nepal, we have designed various programs under this global sustainability framework of ‘Me We World’, with an emphasis on Water and Sanitation, Climate Protection and promoting Healthy Active Living.
We have recently launched two of our flagship CSR initiatives the Support My School Program and the 5BY20 Parivartan Training Program in Nepal.
We have launched the ‘Support My School’ Campaign in partnership with UN HABITAT, ENPHO, CEN and some municipal corporations. This is grassroots level campaign that aims to create awareness and address issues in schools which lead to absenteeism or children dropping out of school. We are focusing on improving water and sanitation facilities and developing the overall infrastructure of schools across Nepal.
The 5BY20 Parivartan Program is a women’s retailer training program, part of our global initiative that aims to economically empower 5 million women across our value chain by the year 2020. Through this program we are training Nepali women retailers on business skills, such as Shop, Stock, Customer and Financial Management. We launched this initiative with 30 women retailers on 8th March- International Women’s Day and we plan to conduct more trainings across Nepal this year.
One of our associates recently went to Antarctica as part of an international team with Sir Robert Swan- a renowned polar explorer and environmentalist. Swan visited Nepal last year to support our efforts towards water and environmental protection. We hope that through this international exposure our associates can create awareness and make a difference towards climate change.
Coca-Cola Nepal also has partnerships with UNHABITAT and the Government of Nepal for The Partnership for Safe Water Project to reduce the risk posed by untreated water. The Project provides improved access to drinking water by promoting Household Water Treatment (HWT) options in local communities and spreading awareness on ‘Safe drinking water’ in urban centres of Nepal.
We have also partnered with the All Nepal Football Association (ANFA) for the Coca-Cola Cup, national grassroots football tournament since 2006. This initiative is a part of our global commitment to create a sporting culture in the country by promoting a healthy and active lifestyle. This tournament involves 10, 000 boys and girls from over 500 schools across 6 regions of the country.
We also organize a number of initiatives to create awareness on World Water Day and World Environment Day,as well as conduct the Everest Marathon and International Olympic Day Run.
How has the ongoing financial or economic crisis in Nepal affected the soft drinks market? And how is Coke facing it?
Economic and political stability is important for the country and of course for businesses as well. As a business, we hope that there is ample predictability in policies and regulations. As a business entity, we expect governmentsto have a long term outlook and a world view to spur growth in any market that we operate in. We believe that Governments should work collectively with industry and policy bodies to implement effective policies that spur economic growth. The Coca-Cola strategy for solving some of the world’s most pressing issues is what we call the ‘Golden Triangle’ -- the coming together of civil society, business and government to develop collaborative partnerships and create a model for growth. We have been constantly working towards such partnerships worldwide and we are seeing a positive difference in these communities.
What are your views on the trends in the Nepali economy over the next one or two years, and impact for soft drinks business in general, and the Coca Cola group of drinks in particular?
As I mentioned, creating stable and predictable policies and a business-friendly environment is something that all business entities look for to invest in countries in the long term. As businesses we hope that Governments will work collectively with industry and policy bodies to implement effective regulationsto spur economic growth. As I mentioned, our philosophy is driving effective collaborations and partnerships between government, business and civil society.
With regards to the beverage industry in Nepal, I think the packaged beverage consumption is on the rise and the non-alcoholic ready to drink (NARTD) category continues to evolve to varying consumer demands. Coca-Cola has a strong focus on innovation and we will continue to provide our consumers with beverage choices for all occasions and cater to the advancements of the Nepali beverage market.