Coke takes road to transformation, targets health-conscious consumers

The country’s largest beverage maker Coca-Cola India is slowly but steadily transforming itself, as the pressure to move away from fizzy drinks and target health-conscious consumers grows. In the past three years, the Indian unit has launched nearly two dozen products in categories such as juices, water, and milk-based beverages, taking its revenue contribution from non-fizzy drinks to 40 per cent from 25 per cent.

Backed by recent bold bets in coffee (it acquired Costa Coffee last week globally and will rejuvenate the brand in India) as well as its interest in health drinks, including brands Complan and Horlicks that are up for sale, Coca-Cola India's plan, say executives, is to take its revenue contribution from non-fizzy drinks to 50 per cent in the next three to five years.

Coca-Cola's total India revenue, including turnover from company-owned and franchisee bottling operations, is Rs 160 billion, with 60 per cent coming from fizzy drinks. A Coca-Cola India executive said, “We have a good mix of sparking and still beverages. It is difficult to say when the share will become equal but what we can say is that both categories are growing at a healthy rate.”

Coca-Cola takes big step into coffee with $5.1 billion Costa deal

Coca-Cola Co has agreed to buy the world's second largest coffee chain Costa from Britain's Whitbread Plc for $5.1 billion including debt, opening a new front in its push into healthier markets.

The two companies said on Friday that Coke, one of the biggest soft drinks groups in the world, would buy Costa's almost 4,000 outlets across markets such as Britain, Europe and China after Whitbread's board unanimously backed the deal.

Whitbread shares jumped 19 per cent in early trading, with dealers saying the purchase price was more than 700 million pounds ($911 million) higher than expected.

The purchase of the biggest coffee chain behind Starbucks adds to Coca-Cola's drive to diversify away from fizzy drinks and expand its options for increasingly health-conscious consumers after countries started introducing sugar taxes.