Coca-Cola
Global beverage giant Coca-Cola has sold a 40% stake in its Indian bottling subsidiary, Hindustan Coca-Cola Beverages Pvt Ltd (HCCBL), to Jubilant Bhartia Group. The strategic deal, valued at around Rs 10,000 crore according to media reports, marks a significant shift in Coca-Cola’s operations in India.
Organization and its significance
Coca-Cola statement on the deal
The Coca-Cola Company has announced its agreement with Jubilant Bhartia Group, a multi-billion dollar conglomerate known for its diverse business interests. The joint statement highlighted the role of the partnership in accelerating Coca-Cola’s growth and adding value to the local community and consumers.
Jubilant Vision
Jubilant Bhartia Group founders Shyam S Bhartia and Hari S Bhartia expressed optimism about the investment. They highlighted the partnership between the two companies and their shared vision to expand Coca-Cola’s portfolio of popular brands to a wider audience in India.
India: Coca-Cola’s core market
Coca-Cola’s presence in India
India ranks fifth in terms of Coca-Cola sales globally.
The company operates through two entities in India:
Coca-Cola India: Handles branding and marketing operations.
Hindustan Coca-Cola Beverages Pvt Ltd (HCCBL): Oversees manufacturing and distribution.
Financial highlights
Coca-Cola India: Consolidated revenue of ₹4,713.38 crore in FY24, with a 41.82% decline in revenue to ₹420.29 crore.
HCCBL: Achieved 10.10% revenue growth, reaching ₹14,021.54 crore in FY24 Net profit tripled to ₹2,808.31 crore.
Asset lightening plan
Coca-Cola’s global approach
The sale is in line with Coca-Cola’s global asset lightening plan, which includes divesting bottling operations to focus on core brands and innovation. The company has already sold bottling operations in key markets in India including Rajasthan, Bihar, Northeast and parts of West Bengal.
Strategic investment
HCCBL CEO Juan Pablo Rodríguez described the partnership with Jubilant as a significant step towards innovation and sustainable growth. The partnership leverages Jubilant’s expertise to complement Coca-Cola’s strengths.
Jubilant Bhartia Group – a strong partner
Quick Service Restaurant Technology
Jubilant Bhartia Group subsidiary Jubilant FoodWorks is a leading player in the quick service restaurant (QSR) sector. With over 3,130 stores across six countries, it manages franchise rights for brands such as Domino’s, Popeyes and Dunkin’, as well as its own brands, Hong’s Kitchen and COFFY.
Expansion potential
The group’s experience in managing large operations and diverse portfolios positions it as an ideal partner to drive HCCBL’s growth and market penetration.
Conclusion
The sale of 40% of its shares in HCCBL to Jubilant Bhartia Group represents a strategic move by Coca-Cola to further its operations and leverage Jubilant’s extensive experience. As the beverage giant continues to focus on its asset-light strategy, this partnership is expected to open up new opportunities for growth and innovation in the Indian market.