Hindustan Coca-Cola Beverages (HCCB), the bottling arm of Coca-Cola, is in the final stages of negotiations to sell some of its largest bottling facilities in the north, northeast and parts of west to three independent franchise bottlers, executives aware of the development said.
The beverage company had sold some of its bottling plants in 2019, but the divestment process got disrupted due to the pandemic. Coca-Cola wants to divest asset-heavy bottling operations in India to focus more on brands and strategy, in line with its global policy. The three independent franchise bottlers are the MMG Group, the Ladhani Group and the Kandhari Group, people aware of the development said.
An email query addressed to HCCB’s spokesperson remained unanswered till press time. Executives at the franchise partners could not be reached for comment.
India is the fifth largest market globally for Coca-Cola, which leads the carbonated beverage market here with Thums Up, Sprite and Coke. The company also makes Minute Maid juice and Kinley water. In a related development, one of Coca-Cola’s franchise bottling partners, SLMG Beverages, on Tuesday announced a new manufacturing facility at Amethi, Uttar Pradesh where it said it will invest ₹700 crore.
“The bottling plant will play a pivotal role in meeting demand for Coca-Cola products in Uttar Pradesh, Uttarakhand, Bihar and Madhya Pradesh,” Coca-Cola said in a statement. It said the plant will manufacture sparkling drinks, juices and water. SLMG Beverages currently has seven plants spread across UP, the company said. It reported revenue of ₹3,600 crore in fiscal 2022 and is forecasting ₹7,500 crore for FY24.
HCCB bottles close to half of Coca-Cola’s overall volumes in India, while the rest is managed by independent bottlers which operate about two dozen franchisee plants for the company. The bottling company reported revenue of ₹12,840 crore in FY23, an increase of 40% over the previous year, according to data sourced from business intelligence platform Tofler. Profit increased 116% to ₹809 crore in FY23. The company attributed the growth to strategic investments in entry-priced packs such as 150 ml tetra packs, and 200 ml and 250 ml returnable glass bottles and PET packs.
In 2019, HCCB had divested some bottling operations in Delhi-NCR and parts of UP to MMG Group and Ladhani Group. For the third quarter ended September 2023, the Atlanta-based beverage maker said it generated 2.6 billion transactions in India, backed by affordable price points and stepping up availability.