Soft drinks major The Coca-Cola Company on Thursday said its India business was unfairly impacted in the June quarter due to unseasonal rains, its Chairman and CEO James Quincey said.
However, the India market had an overall growth and contributed to the growth of the Asia Pacific region, said the company in its June quarter results. He said some of its markets during the quarter were impacted by specific market conditions. In the June quarter, China was affected due to specific local conditions and recovery was slowed in the second quarter. Consumer confidence is below the pre-pandemic level, he added.
"In India, business was unfairly impacted by unseasonal rain and cooler temperature in the quarter. However, the growth outlook remained intact," Quincey said in an earnings call. He said there was strong demand for some of its juice businesses in China and India.
Summer is the season which accounts for major sales for beverage makers. However, unseasonal rains in certain parts of the country, mainly in North India during the peak season had an adverse impact on sales. India is the fifth largest market for Coca-Cola.
Inflation is still elevated in some markets, impacting consumers in several geographies and making them value-conscious. In some markets, it has started to moderate, Quincey said. "Five of our top 40 markets are currently experiencing over 20 per cent annual inflation," he said.
In the June quarter, the company witnessed a growth in the unit case volume in developing and emerging markets like India and Brazil, said an earning statement from Coca-Cola Company. In the Asia Pacific market, including India, Coca-Cola's unit case volume grew 2 per cent, driven by growth across most categories.
"Growth was led by India, China, Thailand and Vietnam," it said. The company gained value share in total non-alcoholic-ready-to-drink (NARTD) beverages in the Asia Pacific market, led by share gains in South Korea, India, Australia and Thailand, the statement said.
The Atlanta-headquartered company reported a 5.71 per cent growth in its consolidated net operating revenue to $11.97 billion. Its unit case volume was "even" for the quarter.
"Developed markets were even, as growth in Mexico was offset by declines in the United States and Spain. Developing and emerging markets were also even, as growth in India and Brazil was offset by the suspension of business in Russia in 2022 and a decline in Pakistan," it added. Over the results, Quincey said: "I am encouraged that our all-weather strategy, working together with our bottling partners, has delivered strong second-quarter results".
"We are executing efficiently and effectively on a local level while maintaining flexibility on a global level. The strength of our first half results and the resiliency of our business give us the confidence to raise our 2023 guidance," he said. Coca-Cola Company has raised its forecast and said: "The company expects to deliver organic revenue (non-GAAP) growth of 8 to 9 percent".
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