Coca-Cola India has a new ambition – to become a complete beverage company. Which essentially means providing more choice to the consumer by offering newer beverages and many based on fruit and fruit juices. This has been inspired by the concept of the circular economy or a virtuous economic cycle. This initiative will create a spurt in the company’s local procurement of fruit and farm level interventions and will have a positive impact on the Indian horticulture ecosystem. The two key components of this project are, launching new and innovative products and sustainable sourcing.
Product innovation and taking them to market is handled by Asim Parekh VP, Fruit Circular Economy, Coca-Cola India who says “To spark the change we’re bringing many other drinks like tea, coconut water, and juices to our customers. We are launching several new local brands at various price points and for different customer categories. Infact, we are now emulating a start up with 17 brand launches in 2018 and many more slated for 2019. We have made small teams that are quick to innovate, quick to market and adapt. Our core philosophy aided by a sustainable supply chain is about reaching customers and mapping their journeys in detail,”
This way of functioning is a big shift and is rooted in the understanding that India is not exactly a homogenous country, besides social and cultural diversity, there is economic classification. In addition, the modern consumer in big and small cities and even semi-urban areas wants personalization of their products and services. Keeping the potential growth of the economy in mind, even seemingly small customer segments could be large value generators.
One such sustainable sourcing program is Unnati Mango. The program was started to increase crop yields, save water, bring in ‘Good Agricultural practices” and improve the livelihoods of mango farmers in Chittoor district of Andhra Pradesh. Emboldened by the success of the program, the company has now extended this framework to other fruits and placed it under a strategic framework called the “Fruit Circular Economy”. Under this program orange sourcing and farming initiatives were launched in 2016 across the water stressed regions of Maharashtra and Madhya Pradesh. It encouraged the adoption of newer varieties of orange that have 50% higher juice content. Says, Ishteyaque Amjad, VP, Public Affairs, Communications and Sustainability, Coca-Cola India and South West Asia , “Entering and staying in the fruit production and processing ecosystem is part of our long term strategy and commitment to the country. Through these sustainable agricultural initiatives we plan to double farmer’s incomes. All projects under the Fruit Circular Economy framework consist of modern nurseries with high quality plants, intensive training to farmers, drip irrigation techniques and an assured buy back. About 250,000 farmers would be benefited over 10 years through these programs. At one level, these projects help the company in creating resilient high quality supply chains at another they also ensure that the shift towards juice based beverages is a smooth transition.”
Coca-Cola’s 2020 sustainability goals put sustainable sourcing of key agricultural ingredients as a top priority. Concerted efforts are being made by the company and nearly 250 bottling partners in more than 200 countries and territories to ensure this becomes a reality. The Coca-Cola Company is one of the largest buyers of Indian agricultural produce, sourcing 95% of its ingredients locally. This helps the company in sourcing high quality produce and also benefits the local farmers who get a ready market. India is the second largest producer of the fruits and vegetables in the world. The country grows the most amounts of bananas, papaya, mangoes, guavas, pomegranates and is the second largest producers of potatoes, green peas, tomatoes, cabbage and cauliflower. However, only 2.2% of fruits and vegetable output in India is processed. Coca-Cola views this as India’s untapped potential.