In India’s second half of 2023, when the ICC Men’s Cricket World Cup coincides with the holiday season and is anticipated to increase consumption, beverage giant Coca-Cola will spend more on brands than ever before, according to a top corporate official on Friday.
Coca-Cola India and South-West Asia Vice President of Marketing Arnab Roy said that although the company has not disclosed the amount of spending, it is a “big part of overall investment” that they are going to make during the ICC World Cup, which provides “a very big platform” for their business expansion.
Coca-Cola, which experienced a “challenging summer” this year due to unseasonal rainfall, anticipates that despite difficult macroeconomic conditions, people will spend money over the holiday season across categories, and cheap packages will perform well.
Roy responded to a question about whether Coca-Cola can make up for a weaker second quarter by saying, “Probably based on the trends we are seeing both in Q3 and the beginning of Q4, we feel very positive and encouraged, with the way we hopefully end this year.”
In some regions of the nation, festival season has already started, and Coca-Cola has launched brand activation. During the ICC Cricket World Cup, Coca-Cola is also conducting similar activities in nearby markets like Nepal, Bangladesh, and Sri Lanka, he added.
At a virtual media round table, Roy stated, “This is going to result in one of the largest investments we have ever done in Q3 and Q4 combined, in the history of our company in India.”
He stated that Coca-Cola and its bottling subsidiary Hindustan Coca-Cola Beverages would make the investment.
Roy responded to a question regarding the investments by noting that “Ad spends in the December quarter as a percentage of overall spending are 5-7% higher compared to a year ago.”
According to financial information provided by the business intelligence platform Tofler, Coca-Cola India’s advertising and promotional costs was Rs 737.97 crore in FY22.
Since the event is taking place in India, Coca-Cola, which is the ICC’s exclusive non-alcoholic beverage partner until 2023, has activated both its brand Thums Up and Limca Sportz, its domestic brand Limca.
Additionally, Sprite, a lime-flavoured beverage, is being added. Sprite is the second brand in India to surpass USD 1 billion in yearly sales.
“After about 11–12 years, India is hosting the ICC World Cup, which is the country’s biggest sporting event. Therefore, it is crucial for us to engage our brands, our entire system, and definitely make sure that we can take advantage of this significant platform to maintain the current level of revenue, according to Roy.
Roy claims that this applies to “investments in shopper marketing, trade marketing, engaging with our consumers, working with retailers or distributors, in addition to investments in basic brand marketing. Therefore, it was crucial for us to stimulate the entire ecosystem by raising all DMEs (Direct Marketing Expenses).
It is a joint effort between two companies since “Thums Up is leading all the work in ICC World Cup and brand Coca-Cola… around the festivals” with a localised strategy. Due to early rains, Coca-Cola experienced a “challenging summer” this year, but Roy noted that “long-term metrics are looking very strong, therefore it was very important for us to continue investing in the business…in our brands, so that we do not lose the momentum.”
Regarding the advantages, Roy noted that normally, business expansion does not occur in the second half of a year.
However “with the ICC World Cup, especially as you go to small town and rural India, whether you can start increasing your numeric distribution from what you have had in the past, in this particular period.”
Coca-Cola considers the demand to be “very robust” in both urban and rural areas. Through reasonably priced packs, the company is maximising demand while providing a quantitative boost. To maintain and secure the market at the Rs 10 and 20 price points, Coca-Cola is extending its returnable glass bottle business throughout India.
In addition, Coca-Cola is a major sponsor of Disney Star, which has exclusive broadcast and media rights for the ICC Men’s Cricket World Cup on linear and digital platforms. It has agreements in place for Disney+ Hotstar’s linear and digital streaming services.