Coca Cola India To Rearrange Bottling Unit Structure

Allied Blenders and Distillers (ABD), an Indian-made foreign liquor (IMFL) producer, has secured final approval from the Securities and Exchange Board of India (SEBI) to raise Rs 1500 crore through an initial public offering (IPO). This significant step marks a pivotal moment for the company as it continues to expand its presence in the retail and hospitality sectors across India.

ABD refiled its IPO papers with SEBI on January 15, 2024. The IPO includes a fresh issue of up to Rs 1000 crore and an offer for sale of up to Rs 500 crore by the Promoters and Promoter Group. Shares are offered at a face value of Rs 2. The offer for sale comprises Rs 250 crore by Bina Kishore Chhabria, Rs 125 crore by Resham Chhabria Jeetendra Hemdev, and Rs 125 crore by Neesha Kishore Chhabria, with a reservation for eligible employees.

Proceeds from the fresh issuance, amounting to Rs 720 crore, will be allocated for prepayment or scheduled repayment of certain outstanding borrowings and general corporate purposes. The company may also consider a "Pre-IPO placement" of up to Rs 200 crore, which would reduce the fresh issue size if completed.

Established in 1988, the Mumbai-based ABD initially gained prominence with its Officer’s Choice Whisky in the mass premium segment. By Fiscal 2023, the company held an 11.8 percent market share in the Indian whisky market, underscoring its strong position as a leading exporter of IMFL. Over the years, ABD has diversified its product range across various categories and segments, leveraging its strength in the popular segment to launch successful brands in both prestige and premium segments.

Recent product launches reflect ABD's shift towards premiumization. In April 2024, the company reported that its new brand, ICONiQ White Whisky, reached 2 million cases sold in its first year. Additionally, in January 2024, ABD expanded its portfolio beyond whisky with the introduction of Zoya Special Batch Premium Gin.

ABD's nationwide sales and distribution network covers 30 states and union territories, with products available in 79,329 outlets. As of August 31, 2023, their product portfolio included 17 major IMFL brands across whisky, brandy, rum, and vodka.

India's alcoholic beverage market is one of the fastest-growing in the world, making it the third-largest market globally after China and Russia. IMFL dominates the market, contributing close to 72 percent in value to the overall market in Fiscal 2023. The industry's growth is fueled by rising incomes, urbanization, and a growing preference for western tastes and trends, leading to increased demand for premium products. The purpose of whisky consumption has also shifted from being a stimulant to recreation and socializing, further driving the trend towards premiumization.

ICICI Securities Limited, Nuvama Wealth Management Limited, and ITI Capital Limited are the book-running lead managers for the IPO, with Link Intime India Private Limited serving as the registrar. The equity shares are proposed to be listed on the BSE and NSE.

Homegrown beverage maker Manpasand Beverages Ltd aims to have 20 plants pan-India by 2020 in its effort to drive volumes.

With water being the most in-demand beverage of future, Manpasand would launch multiple facilities of packaged drinking water.

In its Q3 results announced on Tuesday, the company reported 64% rise in net profit at Rs. 11.91 crore in the third quarter as against net profit of Rs. 7.24 crore in Q3 of last fiscal.

“For a country whose per capita consumption of cold drinks stand at mere 6 litres against 90 litres in US, we need to have more affordable products to drive sales. We can beat MNCs only by creating volumes and flooding the market with desi brands” said Dhirendra Singh, Chairman of Manpasand Beverages Ltd.

Singh also shared Rs 600 cr expansion plan which is already underway across multiple locations and Manpasand would have double capacity by the end of 2018. The company clocked a turnover of in excess of Rs 750 crore in 2016-17.

Manpasand that has been driving growth through its flagship brand Mango Sip that has 75% share in the revenues has tied up with Parle Products to cross promote products. This would enable Manpasand to get access to the 4.5 million outlets of Parle Products spread across India.

Bengaluru’s popular street food restaurant, Yumlok, has earmarked an aggressive growth trajectory for the year 2018. Currently, Yumlok has three outlets and one cloud kitchen and it plans to setting up 50 stores by 2020.

Yumlok also plans to branch out of its home market and establish company owned restaurants and franchises in other parts of the country. Targeted at the youth, Yumlok specializes in serving North Indian Meal combos, Delhi style chaats, and some Indo-Western fusion dishes that are a blend of western recipes with Indian spices.

As founders of the company explain, continuous menu engineering is the most important thing for long term sustenance in restaurant business. Even in the upcoming restaurants, Yumlok intends to follow two philosophies in their menu -  first is to serve Classic food, which will sell anytime of the year without any marketing. Second, continuously innovate and improvise the food in aspects of aesthetic, organoleptic and packaging to bring back customers regularly.

Started off as an experiment in 2015, Yumlok has seen tremendous success. It is serving 10,000 plus orders per month with average order value of Rs. 325, only with word of mouth publicity. 

Avinash Gupta, founder and CEO of Yumlok, says, “We started in 2015 when everyone wanted to buy in to the next big food tech startup. A lot of food related startups were getting funded back then, most haven't survived beyond 2016. Restaurants are a hard business with 18hr of working, 365 days a year. It was never easy but a sharp focus on quality of food and service helped us get off-ground. Currently all of our stores are 4 star plus rated across all major food search platforms (Zomato, Swiggy, Magic Pin etc.). Our stores are also one of the highest order generators in online ordering platforms like Zomato online ordering and Swiggy.”

Yumlok is planning to open their fourth store in Bengaluru soon at Harlur Road. As per their projections, a city like Bangalore can easily accommodate about 50 Yumlok and they have also identified 5 other cities in India, which have a sizeable immigrant population. The company is eyeing to grow on average 60% YoY in terms of stores and establishing 100 stores in about 5 years.

Teesta River Tea, a Bangalore based start-up has launched its array of tea products online. The brand has launched its product range in Amazon and plans to sell across selected super markets and stores in Southern India in December 2017.

The move comes at a time when India's tea market is estimated to be over 15,000 crores with a penetration of more than 90 percent in the domestic market.

The Teesta River Tea Company has been promoted by Neeraj Verma, an ex-Hindustan Unilever (HUL) hand with vast experience in the tea industry and Unilever Marketing and Raghvendra Rao, a Chartered Accountant by profession. Neeraj and Raghavendra are determined to bring tea lovers something unique. Teas blended with Super Fruits, Flowers and Herbs are healthy and tasty. Green teas with Rose is a fine blend. The company uses only natural fruits and flavours.

Besides loose teas in packets the company has introduced Lounge Tea brand in Silken Pyramid tea bags which not only allows consumers to see the fruits and flowers along with teas but enables quick infusion.

Teesta Beverages has positioned teas in each key segment. Teesta High Range Tips is a heady blend of super fine Darjeeling and Nepal Himalayan teas with a strong Darjeeling flavor. Teesta Premium CTC teas, a blend of Assam classic teas with Dooars, provide tasty and strong teas to start a refreshing day.

The passion behind Teesta products can be traced back to the owners who believe that tea is the best beverage on the planet. For them, it is an opportunity to give people something that matters to them in their everyday life. The idea now is to help people choose their favorite products from the convenience of their homes.

Neeraj Verma Founder Of Teesta River Tea said “Teesta River Tea differs from other brands because of the fine Silken Pyramid tea bags that preserve the aroma and flavor of its ingredients. We enable consumers to get fresh teas from the bush to the Brand within 15 days compared to other products which take around 3 months. We have no middlemen and garden fresh teas are delivered for blending and tasting from the tea estates in a week. Teesta Beverages with its continuous innovation in tea blending Super fruits and herbs is slowly making its presence felt in Amazon. Response is more than we had imagined. We are now eagerly looking to launch in the Southern Region and we are confident that Teesta Beverages will provide a great experience to the consumer and establish new blends which are popular globally”.

FMCG major Dabur India has launched its packaged fruit-based mocktails in a ready-to-drink format under the Réal brand. Company claims it is the first ever redy-to-drink mocktail in India which is specially crafted by professional mixologists and marks another first for Dabur.

Réal Mocktails has two variants Virgin Mary and Virgin Pina Colada. The Réal Mocktails will be available in 1-litre Tetrapaks, priced at Rs 110.

Mayank Kumar, Marketing Head-Foods, Dabur India said “Consumers in India today relish the experience of having Mocktails at restaurants and bars and wish to enjoy the same taste and experience at home with their friends and family. However, they are not sure of the right ingredients, mixes etc to create these mocktails. With Réal Mocktails, we are taking away the hassle of creating these tasty mixes to spice up their house parties, and giving our consumers are ready-to-serve option that’s made with real fruits. This would help make their house parties and social gatherings so much more fun and interesting when it comes to choice of beverages. Dabur is the pioneer in the packaged juice market in India and we have continuously strived to stay relevant to our consumers by launching new variants to cater to their varied needs and occasions. Our understandings of Indian consumers taste palate and preferences have helped us stay ahead of the curve in satisfying their needs. Even with the Réal Mocktails, we are launching the most preferred Mocktail drinks in India.”

Dabur has been expanding its packaged fruit juice range with the launch of new variants like Mausambi juice under the Réal brand, besides introducing Jamun and Amla under the Réal Wellnezz brand to create further excitement in the market and give consumers a wider portfolio to choose from.

Dabur said in a statement “Réal Mocktails do not have any added preservatives and have been prepared by experts with the right ingredients and mix. Company further expanded its presence into newer formats with the launch of Réal VOLO, which marked its entry into the aerated fruit beverage category. The launch of Réal Mocktails is another step forward in expanding the category”.

Indian snacks food company, Prataap Snacks has entered the category of sweet snacks market through its wholly owned subsidiary with the launch of its new brand ‘Rich Feast’, it said in a statement. The first product under the new brand is ‘Yum Pie’, a three-layered snack with sponge cake, flavoured jam, and chocolate.

The company has set up a fully automated manufacturing plant with its wholly owned subsidiary pure n Sure Food Bites in Indore Madhya Pradesh to manage the production of Yum-Pie.

Amit Kumat, MD & CEO of Prataap Snacks said “Our new brand ‘Rich Feast’ marks our entry into sweet snacks category where we see a lot of untapped growth opportunity. With this, we will now get into a bigger macro-snack category from only being a salty snacks player. We intend to grow the Rich Feast brand further with new launches in the coming time”.

PepsiCo's India lost its fizz even as its largest rival Coca-Cola posted double-digit growth amid health conscious consumers cutting down on sugary aerated drinks. PepsiCo India Holdings saw revenue grow 0.2% during year to March 2017 to Rs 6,540 crore while Hindustan Coca-Cola Beverages, which account for two-thirds of Coca-Cola's revenue, posted 11% growth in revenues at Rs 9,472 crore.

Hindustan Coca Cola Beverages Spokesperson said “it changed accounting standards that propped up revenue growth. On a comparable basis, both current and previous year as per IND AS reporting, our revenues have remained steady. We certainly have the scale and the reach to make a difference to the food-processing sector in India and the agri ecosystem of the country. There are more people entering the ready-to-drink beverage category and our focus is to build HCCB into a ‘total beverage company’ that has a play in all beverage categories of relevance”.

PepsiCo India spokesperson said “This was reflected in FY 2016-17 performance that saw us progressing ahead with strong double digit growth on our core brands like Tropicana and Lay’s. While the end of H2 FY 2016-17 growths was impacted on account of some macro head winds, business momentum has been recovering over the last 3 quarters. Sales were also impacted during last two quarters of 2017 financial year due to demonetisation, where people were forced to use things other than cash".

Growth has slowed in the Rs 22,000-crore carbonated soft drinks market as consumers switch to healthier beverages such as juices, energy drinks, flavoured tea, fortified water and dairy-based beverages. Both PepsiCo and rival Coca-Cola have been hedging risks by reducing dependence on core soft drinks and introducing either sugar-free drinks or non-aerated beverages.

Pepsi lowered its investments on commoditised, low margin segments including low juice content segment. PepsiCo's recent launches include 7Up with natural sweetener stevia, Pepsi Black with zero sugar, hydration drink Revive and several local and international flavours in juices.

Coca-Cola India said that it intends to make its cola brand, Thums Up, the first home-grown billion dollar beverage brand in the next 2 years. Company also launched the first ever variant of Thums Up, Thums Up Charged, which the company claims is much more stronger than the previous version.

Company and its bottlers will invest suitably in launching new packs, expanding distribution and augmenting manufacturing capacity to increase the sales of Thums Up by 2020.

Coca-Cola India had earlier last year said that it aims to more than double retail sales of its mango beverages brand Maaza to one billion dollar by 2023, as part of its strategy to widen fruit based business.

Vijay Parasuraman, vice president marketing, Coca-Cola India & South West Asia said “We thought that Maaza will be the first home-grown brand from from Coca- Cola India's stable to attain one billion dollar sales mark but when we assesed the growth of Thums Up, we realised that it can reach one billion dollar in revenue even before Maaza”.

According to data by research firm Nielsen, Thums Up, which Coca-Cola had acquired from Ramesh Chauhan’s Parle in 1993, is the country’s leading cola brand, ahead of Coca-Cola and rival Pepsi.

Coca-Cola, the world’s largest beverage company, has not been able to crack a section of the Indian market even with brands such as Sprite, Maaza and Thums Up.

John Murphy, President of the Asia Pacific Group of Coca-Cola, said “India is “a different story,” referring to a market of almost 300 million people in the bottom half of the pyramid in India that is yet to take to the global soft drink brands. We have tried so many times in my time in the Coca-Cola system to crack the code there and we haven’t done it. We have got a team of pretty smart people who want to have the legacy to be the first to do so. India is the US giant’s sixth largest market and Coca-Cola is the country’s leading beverage maker. In India we have leader brands, but we have an industry that is very underdeveloped. Sprite, Maaza and Thums Up have tremendous equity in India and the company’s job is to leverage those brands to help grow the industry. We’re excited with the work we have under way to do that. In addition, we have a couple of other categories that we believe have tremendous room for growth as we go forward and the good news is there are not too many there yet who have cracked the code on leadership in those categories. Beverage landscape in Asia-Pacific is very different today than you have seen in other parts of the world. Seven out of every 10 beverages consumed in Asia-Pacific are non-commercial.

Sales growth for soft drinks in India has tapered as urban consumers opt for low-sugar beverages and rural buyers cut discretionary spending. Smaller regional brands that are cheaper are getting popular, hurting the prospects of global beverage companies including Coca-Cola and PepsiCo.

While addressing at conference Murphy also said “Home rituals are important, hence the prevalence of self-home beauty, homemade juices. They love a lot of stuff, sweet, unsweet, hot, cold, gooey, un-gooey — you name it. They are very trend conscious increasingly in today’s environment and those trends are influencing the repertoire of beverages that they are trying and they love to try”.

Mentioning the launch of Mosambi juice under its Minute Maid franchise, Murphy said “marrying a local desired fruit to a global brand creates value. The move to localise to the last mile with ethnic flavours and leveraging local fruit-based beverages is aimed at fighting back the onslaught of regional brands”.