Distribution of Coke

8/12/2019 Distribution of Coke

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MISSION:

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a

company and serves as the standard against which we weigh our actions and decisions.

To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference.

VISION:Our vision serves as the framework for our Roadmap and guides every aspect of our business

by describing what we need to accomplish in order to continue achieving sustainable, quality

growth.

People:Be a great place to work where people are inspired to be the best they can be. Portfolio:Bring to the world a portfolio of quality beverage brands that anticipate

and satisfy people's desires and needs.

Partners:Nurture a winning network of customers and suppliers, together we createmutual, enduring value.

Planet: Be a responsible citizen that makes a difference by helping build and supportsustainable communities.

Profit: Maximize long-term return to shareowners while being mindful of our overallresponsibilities.

Productivity: Be a highly effective, lean and fast-moving organization.


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HISTORY OF COCA-COLA

The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical

Company, a drugstore in Columbus, Georgia by John Pemberton, originally as a coca

wine called Pemberton's French Wine Coca. He may have been inspired by the

formidable success of Vin Mariani, a European cocawine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton

responded by developing Coca-Cola, essentially a non-alcoholic version of French

Wine Coca. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8,

1886. It was initially sold as a patent medicine for five cents a glass at soda fountains,

which were popular in the United States at the time due to the belief that carbonated

water was good for the health.[9] Pemberton claimed Coca-Cola cured many diseases,

including morphine addiction, dyspepsia, neurasthenia, headache, and impotence.

Pemberton ran the first advertisement for the beverage on May 29 of the same year in

the Atlanta Journal.

By 1888, three versions of Coca-Colasold by three separate businesseswere on

the market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and

incorporated it as the Coca Cola Company in 1888. The same year, while suffering

from an ongoing addiction to morphine, Pemberton sold the rights a second time to

four more businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H.

Bloodworth. Meanwhile, Pemberton's alcoholic son Charley Pemberton began selling

his own version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the

other two manufacturers could continue to use the formula. So, in the summer of

1888, Candler sold his beverage under the names Yum Yum and Koke. After both

failed to catch on, Candler set out to establish a legal claim to Coca-Cola in late 1888,

in order to force his two competitors out of the business. Candler purchased exclusive

rights to the formula from John Pemberton, Margaret Dozier and Woolfolk Walker.

However, in 1914, Dozier came forward to claim her signature on the bill of sale had

been forged, and subsequent analysis has indicated John Pemberton's signature was

most likely a forgery as well.


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Coca-Cola India was the leading soft drink brand in India till 1977 when it was forced

to close down its operation by a socialist government in the drive for self sufficiency.

After 16 years of absence, coca cola returned to India and witnessed a different

culture and economic platform. During their absence, Parle brothers introduced a new

type of cola called THUMS UP. Along with, they also formulated a lemon flavoured

drink, LIMCA, and mango flavoured, MAAZA. In 1993, coca cola bought the whole

Parle Brother operation, in a hope to beat the main competitor (Pepsi). They presumed

that with the tried and tested products of Parle they will be able to regain their throne

in the Indian soft drink market. Pepsi having a 6 year head start helped revive the

demand for global cola but it was not easy for the soft drink giant (coca cola) to return

to India. Pepsi put more focus on the youth of the country in their advertisements but

coca cola tried influencing Indians with the American way of life, which turned out

to be a mistake.

Coca-Cola invested heavily in India for the first five years, which got them credit of

being one of the biggest investor in the country; however, their sales figures were not

so impressive. Hence, they had to re-think their market strategies. Coca-Cola learned

from Hindustan Lever that reducing their will result in more turnover, hence leading

to profit. They launched an extensive market research in India. They ascertained that

in India 3 As must be applied; Affordability, Availability and Acceptability. Coca-

Cola learnt that they were competing with local drinks such as Nimbu Pani, Narial

Pani, Lassi etc. and reached to a conclusion that competitive pricing was

unavoidable. Since then they introduced a 200 ml glass bottle for Rs.5.


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Further, they had different advertising campaigns for different regions of the country.

In the southern part, their strategy was to make Bollywood or Tamil stars to endorse

their products. In various regions they tried portraying coca cola products with

different regional food products. One of the most famous ad campaigns in India was

Thanda Matlab Coca-Cola; they featured the same quote with different regional

entities.

Presently, Coca-Cola is the biggest brand in soft drinks and is way ahead in market

share i.e. 60% in Carbonated Soft drinks Segment, 36% in Fruit drinks Segment, 33%

in Packaged water Segment, compared to its arch rival, Pepsi. Diversifying their

product range and having a competitive pricing policy, they have regained their

throne. With virtually all the goods and services required to produce and market

Coca-Cola being made in India, the business system of the Company directly employs

approximately 6,000 people, and indirectly creates employment for more than

125,000 people in related industries through its vast procurement, supply, and

distribution System.

The Indian operations comprises of 50 bottling operations, 25 owned by the

Company, with another 25 being owned by franchisees. That apart, a network of 21

contract packers manufactures a range of products for the Company.

On the distribution front, 10-tonne trucksopen bay three-wheelers that can navigate

the narrow alleyways of Indian citiesconstantly keep our brands available in every

nook and corner of the Countrys remotest areas.


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Company Overview

Coke re-entered India in 1993

Coke India comprises of:

Coca-Cola India

Hindustan Coca-Cola Beverages

Franchisee bottling operations

Coke globally serves 500 brands in 200 countries @ 1.7 billion servings per day

Operates a franchised distribution system 1889

Market Cap: $167.25 Billion (Global)

Revenues: $46.542 Billion (Global)

Employees = 25K direct & 150K indirect (India)

Promotional Schemes

Soft drinks:

600ml 1case + 2x500ml soda free

600ml 2case + 5x500ml soda free

2 litre 1case + 2x500ml soda free

1.25litre 1case + 1.25litre Limca free (1.5litre out of stock)

Juice:

1.25litre 1case Mazaa + 1.25litre Mazaa free

Water:

5box (15x5) + 1box free

Energy drink:

1box (24pcs) + 4pcs free


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Business Model

Manufactures & distributes

Concentrates

Syrups

Bottlers make the final beverage through

COBO

FOBO

Coca-Cola India

RegionalBottlers

Customers

ManufacturesConcentrate,

Beverage base and

Manufacturesfinished

Bottles/Cans/Fountai


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Distribution

Coca-cola company distributes their schemes according to area. Area or place where soft

drinks sold in a large manner, on those place company gives good schemes to shopkeeper and

retailer. Place like railway station bus stand are consider in this category and place which havelow selling where company gives small schemes to shopkeepers.

Bottling partners of coca cola company

In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola

Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and

beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely,

Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners of The Coca-Cola

Company, who are authorized to prepare, package, sell and distribute beverages under certain

specified trademarks of The Coca-Cola Company; and an extensive distribution system

comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells

concentrate and beverage bases to authorized bottlers who use these to produce our portfolio

of beverages.These authorized bottlers independently develop local markets and distribute

beverages to grocers, small retailers, supermarkets, restaurants and numerous other

businesses. In turn, these customers make our beverages available to consumers across India.


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Coca cola system worldwide and in India

At the core of our business in India, as in the rest of the world is our production and distribution

network, which we call the Coca-Cola system. Globally, the Coca-Cola system includes our

Company and more than 300 bottling partners. The Coca-Cola Company manufactures and sellsconcentrate and beverage bases. Our authorized bottlers combine our concentrate or beverage

bases as the case may be with sweetener (depending on the product), water or carbonated

water to produce finished beverages. These finished beverages are packaged in authorized

containers bearing our trademarks -- such as cans, refillable glass bottles, non-refillable PET

bottles and tetra packs -- and are then sold to wholesalers or retailers. In India, additionally, the

Company also sells certain powdered beverage mixes such as Vitingo.

Our beverages reach our ultimate consumers through our customers: the grocers, small

retailers, hypermarkets, restaurants, convenience stores and millions of other businesses that

are the final points of distribution in the Coca-Cola system. What truly defines the Coca-Cola

system, and indeed what makes it unique among businesses, is our ability to create value for

our customers and consumers.

In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola

Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and

beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely,

Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners of The Coca-Cola

Company, who are authorized to prepare, package, sell and distribute beverages under certain

specified trademarks of The Coca-Cola Company; and an extensive distribution systemcomprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells

concentrate and beverage bases to authorized bottlers who use these to produce our portfolio

of beverages.These authorized bottlers independently develop local markets and distribute

beverages to grocers, small retailers, supermarkets, restaurants and numerous other

businesses.


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Distribution

Area wise distribution & promotion schemes

Focus on high traffic locations

1 Railway stations

2 Bus stand

Coke India distributes using 2 routes

1 Direct

2 Indirect

The coco cola company produces only the syrup that is used to make it sodas.

It manufactures and distributes a number of non alcoholic beverages concentrates and syrups.

It does not produce the final beverage.

It has 400 brands but it does not produce the final product in any of them.

The company provides the syrups and concentrates to franchisees who use these to make the

final beverage although the company holds interest in some of the major bottlers and

distributors.

The actual formula coco cola uses is a very tightly held trade secret so there is a little

information regarding the exact ingredients and thus, the little information of the cost of their

supplies. Specially ,the company uses high fructose corn syrup, sucrose, aspartame, and citrus

concentrates.


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Flow of the product


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Margins

Margins per crate (comprising 24 bottles of 300 ml each) is Rs 20.

On the 200 ml pack size, margin is Rs 16 per crate.

Sales of the more affordable 200 ml pack size account for about 60 per cent of its total

carbonated soft drink (CSD) sales.

Non-CSD business accounts for 15 per cent.

Outsourced distribution so that trucks and other equipment needed for the purpose are no

longer owned by the company.

Financials


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Distribution of Coke

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