Coca-Cola and partners invest $1.7bn in Indian agri ecosystem
The investment will go towards the procurement of processed fruit pulp and fruit concentrate for Coca-Cola juice and juice drinks; as well as the associated infrastructure.
The effort also aims to contribute to the government's vision of doubling farmers’ income by 2022, creating a “circular economy of sustainable agriculture.”
“The agriculture sector in the country is undergoing rapid transformation with the focus on adoption of technology and scientific methods of farming across the value chain," said Shri Devendra Fadnavis, Hon’ble Chief Minister of Maharashtra, in a statement.
"In line with our commitment to the overall development of farmers, we are encouraging investments in the agriculture sector to substantially enhance productivity and farmers' income”.
The Coca-Cola Company has set out its ambitions to become a 'total beverage company', building more consumer-centric brands such as low and no sugar options and drinks in emerging categories.
“We've been on a journey to expand our portfolio. This [the total beverage company model] is about a full set of categories and responding to the consumer, not a central portfolio with some periphery,” Coca-Cola CEO, James Quincey, said during its latest earnings call.
T Krishnakumar, president, Coca-Cola India and Southwest Asia, says the investment in India's agri ecosystem is important for realizing these ambitions of broadening the beverage portfolio.
Fruit Circular Economy
The fruit circular economy includes a “Grove to Glass” five-year roadmap which spans the entire supply chain and will affect roughly 200,000 farmers and source fruit pulp and fruit concentrate from 2.31 million tons of fruit in India.
“We have already expanded our Minute Maid juice range from one variant in 2007 to 11 variants in 2017 and if we are to realize our portfolio ambitions of being a total beverage company, we must invest in the agri ecosystem,” T Krishnakumar, president of Coca-Cola India and Southwest Asia, said.
Nearly $800m will be used for the procurement of processed fruit pulp and fruit concentrate with the goal of expanding its fruit juice product range, including the launch of Minute Maid Pulpy Mosambi using locally sourced Indian Mosambi - a citrus fruit sourced from India’s western region of Maharashtra.
Minute Maid Pulpy Mosambi contains additional chewable pulp and will be available across India in 250 ml, 400 ml and one liter pack sizes value priced at $0.31 (INR 20), $0.47 (INR 30), and $1.09 (INR 70) respectively.
Upgrading manufacturing and processing systems
Coca-Cola-owned bottling operations in India, which include Hindustan Coca-Cola Beverages and 13 other independent franchise bottlers and fruit processing companies, will invest approximately $900m on improving production operations.
The investment will also go towards upgrading manufacturing lines, juice bottling infrastructure, fruit processing plants and equipment, and agricultural programs over the next five years to support the demand and the growing range of the company’s non-carbonated drinks portfolio.
Coca-Cola also exports raw materials and ingredients worth $280m from India to 44 countries.
