In a significant move, Coca-Cola, one of the world’s leading beverage companies, has unveiled plans to refranchise select bottling operations in India, signalling a strategic shift in its business model. The initiative, led by Coca-Cola’s bottling arm, Hindustan Coca-Cola Beverages (HCCB), aims to enhance local partnerships, streamline operations, and focus on core brands and global strategy.
HCCB has disclosed its decision to refranchise company-owned bottling operations in specific territories in India. The North, East, and North East regions will undergo this transition, with three existing franchise bottlers taking over operations. Moon Beverages, SLMG Beverages, and Kandhari Global Beverages will assume responsibilities for the North-East, Bihar, and Rajasthan markets, respectively.
This refranchising strategy is anticipated to fortify Coca-Cola’s local partnerships, fostering scale and contiguity in one of its largest growth markets. Moon Beverages will extend its presence to the North-East market and select areas in West Bengal, SLMG Beverages will oversee operations in Bihar, and Kandhari Global Beverages will manage the Rajasthan market in addition to its existing territories.
Juan Pablo Rodriguez, CEO of HCCB India, said that this move signifies a strategic decision to redirect investments appropriately across the business. By divesting asset-heavy bottling operations to franchisees, Coca-Cola aims to concentrate on brand development, innovation, and overall strategy, aligning with its global policy and enhancing flexibility in the market.
Coca-Cola’s refranchising approach represents a transformative shift in its business model, with a heightened focus on collaboration with local partners. The move is expected to optimise resources, streamline operations, and drive growth in the Indian market. Leveraging the expertise and local knowledge of franchise bottlers, Coca-Cola aims to accelerate its system and expand its footprint in key regions, further solidifying its position in the evolving beverage industry.
RTM Watch’s Take
Coca-Cola’s decision to sell off select bottling operations to franchisee bottlers reflects its commitment to adapt to changing market dynamics and focus on its core strengths. By entrusting local partners with the bottling operations, Coca-Cola can concentrate on brand building, innovation, and strategic initiatives. This move is likely to enhance operational efficiency, foster stronger local partnerships, and drive growth in the Indian market. It also highlights Coca-Cola’s ability to evolve and optimise its business model to stay competitive in the dynamic beverage industry.
