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Jul, 23 2015

Coca-Cola growth slips year on year during peak summer season

The maker of Coca-Cola and Sprite fizzy drinks makes a statement on Wednesday that \\\'mid-single digit decline in India\\\' year on year in the quarter.

Coca Cola, one of the largest beverages maker globally has seen dropped in sales to low single digits in peak summer season of April-June due to the slow consumption.

According to the statement issued by Coca Cola headquartered in Atlanta, the unseasonal rains and 10-15 percent price increases following 5 percent hike in excise duty is the main reason behind the drop in sales of the beverages.

The maker of Coca-Cola and Sprite fizzy drinks makes a statement on Wednesday that “mid-single digit decline in India” year on year in the quarter.

This year unseasonal rains in the three months impacted both Coca-Cola and PepsiCo, which had to cut back production, with production cycles running only two to three days a week – at least for a limited time. Cool and rainy weather conditions which include Delhi-NCR, Punjab, Haryana, Uttar Pradesh and Himachal Pradesh contribute close to half of national soft drinks sales.

In addition, monsoon rains also covered the whole country in the second half of June despite its slow start. Another factor was this year consumption across everyday products such as biscuits, soaps, toothpaste and beverages have been hit in the quarter, with consumers holding back purchases across categories.

A Crisil report says that the fragile state of rural consumption is reflected in volume and top line growth of companies heavily dependent on hinterland such as FMCG, tractors and motorcycles. April-June is the peak season for soft drinks industry in the country, contributing about 40 percent of annual sales estimated at over Rs 14,000 crore. Similarly, in 2013 also Coca-Cola's volume growth in the quarter of April-June had crashed to 1 percent down from 20 percent.

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