BackWe are looking for more partners like Amazon: Venkatesh Kini
Coca-Cola's Venkatesh Kini speaks of the initiatives in his company to serve the evolving consumer
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Mumbai: The profile of Indian consumers is changing. They buy online, follow global launches and demand international products, even as they retain strong regional preferences. Venkatesh Kini, president (India and south west Asia) at Coca-Cola, speaks of the initiatives in his company to serve the evolving consumer on the sidelines of the FICCI Foodworld India 2014 in Mumbai. Edited excerpts:
There is a lot of change taking place in the Indian economy. How are these changes impacting your business?
There are two things that excite us. One is innovative ways of delivering our core portfolio. For instance, new packaged form, new delivery systems...We have designed for India dispensing and vending systems that can offer a Coke, Sprite or Fanta in cups at ₹ 5 and still make money for the entire value chain. The second is innovative products outside the core portfolio like Kinley Glucojal or the Maaza Milky Delite, a first for us in dairy, launched in Punjab. We have 3,000 products worldwide. In India, we develop a lot of products for India. We have also got back products like RimZim which have a lot of nostalgia and are now looking at taking it to more markets.
You have also jumped onto the Internet bandwagon by launching Coke Zero exclusively on e-commerce portal Amazon.in. Can you tell us what was the response like?
It’s the first time in India that a fast-moving consumer good (FMCG) was launched through an e-commerce portal. There was also no advertising. You never see that happen. The reason we did that was because it gives you a low-cost way to reach the micro niches. Once we gain scale, then we will expand further through modern trade, and then into quick-service restaurants. We are selling four-pack cans there. In three days, we have already got 10,000 orders for the product online.
Are you exploring more such distribution partnerships?
Yes, we are experimenting for certain products going through different distribution channels. We are looking for partnerships like Amazon. Then in some places, we have experimented with different distributors. For products like Schweppes, a premium niche brand, we have partnered with some outlet distributors who work with premium brands. Then there are partnerships with cash and carry companies like Metro Cash and Carry India.
Where do you see the consumption opportunities in India?
If you look at India as multiple Indias, there are two ways: geographic segmentation and the other is socio-economic stratification. If you cut it both ways, you notice some opportunities that are pan-Indian based on the socio-economic strata—an example is Coke Zero. On the other hand, there is geographic preference, like grape as flavour in sparkling beverages is preferred in the south. So, we launched it in Andhra Pradesh and Tamil Nadu.
So which is the bigger opportunity—local and regional food or getting global brands to India?
More than half our portfolio in India is local due to brands like Maaza, Thums Up and also, as we have launched local variants of our global brands like Minute Maid Nimbu and Kinley Glucojal. So, we have a combination of global, made for India, and local made in India products. But everything we have is made in India. India is one of the few countries where we have our own concentrate plants, where we have a local analytical lab, R&D centre and almost all our inputs are domestically sourced including the sugar and juices. We also buy our PET and glass locally.
It was believed that modern trade would become a significant minority of the overall retail trade, accounting for 30-35%. But that has not happened and kirana stores continue to dominate the market with over 90% marketshare. Are you looking at increasing kirana store owners’ efficiencies?
In India, we are giving to kirana stores under a programme called ‘Parivartan’, where we have trained more than 200,000 kirana shop people in the last seven years. We are now looking at expanding this programme and training as many stores as possible through collaborations with the government and the industry. If we can make these people more efficient, make them earn more money, it will impact 10% of the country’s population.
Last year, we have also launched a training programme for dhaba and tea shop owners where we have converted a bus into a classroom and are taking the training to their doorstep in the interiors of the country. We have seen that store owners who have gone through the training are earning more money and so, it works.
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