Coca-Cola may divest bottling partner Hindustan Coca-Cola Beverages

Coca-Cola’s tryst with the Indian market, for long, has been nothing short of a well-heeled odyssey. Having debuted in the Indian sub-continent more than 65 years ago, the beverage company’s success graph in the nation has been nothing short of spectacular. However, rumors are rife that the F&B firm soon plans to divest a part of its business in the country.

Apparently, Coca-Cola India recently began talks with its independent franchise bottlers to disassociate with Hindustan Coca-Cola Beverages, its asset heavy bottling partner, as a part of its global strategy to refranchise bottling across markets, report sources.

For the record, the company-owned HCCB has 18 plants & accounts for two-third of volume of Coca-Cola India. The company has 13 independent franchise bottlers.

This isn’t the first time the company has made it to the headlines in recent times for planning to refranchise its bottling operations. Last month, Coca-Cola declared that it has, temporarily planned to discontinue its proposed plans to refranchise bottling in Africa.

No such discontinuation plans seem to be on the radar for Coca-Cola’s India-based operations so far. Sources claim that the sell-off transaction can be expected to be materialized in phases over a long term, to the long-standing independent bottling partners. The main objective of the company is to move away from the capital demanding, low margin bottling business over a period of time, and to increase focus on the company’s concentrate business, cite sources close to the matter.

None of these plans may actually affect Coca-Cola’s expansion and product launch strategies in India however. The company, a while ago, announced its decision to launch the $2 billion brand, Powerade – apparently the official sports beverage of the ICC Cricket World Cup 2019, In India, and thereby expand its product portfolio in the nation to reach across to consumers who prefer beverages over and above sweetened drinks.

A Coca-Cola spokesperson was reported to state that the company refrains from commenting on speculative news and reverted in an email that the company’s bottling system is doing well & has provided the company with a persistent growth graph in India. There are no changes on that front and the company cannot respond to this query now, the spokesperson added.

Source credits: https://economictimes.indiatimes.com/industry/cons-products/food/coca-cola-begins-talks-to-refranchise-bottling-exploring-deals-with-independent-bottlers/articleshow/69918765.cms?utm_source=ETTopNews&utm_medium=HPTN&utm_campaign=AL1&utm_content=23