Coca-Cola reported on Wednesday that heavy monsoons in several states hurt its volume growth in India for the third quarter. The company, which shared its Q3 earnings, saw a 2% decline in unit volume cases but expects growth to resume in the coming months.
Coca-Cola beverage company reports 2% decline in volume growth
According to The Hindu Business Line, during the earnings call, Coca-Cola Chairman and CEO James Quincey mentioned, “In India, volume declined in states that were impacted by higher-than-normal monsoons. In geographic areas that were unaffected, volume grew mid-single digits. We remain upbeat about progress in integrated execution and our ability to capture long-term growth opportunities.”
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Meanwhile, heavy rains and floods affected the FMCG industry in the September quarter, particularly beverage companies, which saw slow domestic volume growth.
Quincey mentioned, “India had a particularly heavy monsoon in a number of states and that affected the volume. Actually, by the way, heavy monsoons tend to be a good predictor of agricultural yield, which would be then better next year.” He called the heavy rains a “temporary factor” and said the company is “looking for India to return to growth.”
Coca-Cola refranchising cuts unit volume 31%
Notably, Coca-Cola stated that “unit case volume declined 31 per cent, largely due to the impact of the refranchising of bottling operations,” referring to its company-owned bottling investments.
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In January, Coca-Cola transferred its company-owned bottling operations in Bihar, Rajasthan, the Northeast, and parts of West Bengal to independent partners. “During the nine months ended September 27, 2024, the company recorded a net gain of $290 million related to the refranchising of our bottling operations in certain territories in India, including the impact of post-closing adjustments,” it noted in its financial statement.
The packaged food and beverage industry is banking on the festival season. Coca-Cola India previously mentioned seeing a positive sales trend, especially during festivals.
