Beverage maker Coca-Cola on Tuesday said that the lockdown in India has resulted in a steep unit case volume decline in the company’s owned bottling operations across markets, as per a report in the LiveMint.
Coca Cola is one company that has spelt out in public the direct impact of the coronavirus pandemic on its business worldwide. The company says its sales declined 25% globally since the beginning of April 2020. Although the lockdown and shelter-in-place orders have been in place in many geographies, perhaps it is in April that a major part of the geography has been under lockdown. It may also be relevant to note that when the signs of the impending lockdown started appearing in March, many people rushed to their nearest store and stocked up foods, which would have included Coca Cola products as well. That time the sale could have showed a surge even. Subsequently, however, things have changed completely.
It is also essential to understand that Coca Cola gets its revenues from selling its beverages through multiple channels. The consumption of their soft drinks happens in homes, restaurants, cinema halls and so on. The company promotes it as a party drink and large events, weddings and the like would also count among the avenues for sale and consumption of Coca Cola’s products. None of these are operational now. Even within the at-home consumption, the company is witnessing a drop since the trips to the store have fallen dramatically across the spectrum.
While this has been the universal scene for Coca Cola, it has not been very different in the Indian market as well. In fact, the company has stated in its earnings report for the first quarter (covered for three months ending March 27), that the Indian operations played a huge role in the decline of unit case volume by 5% globally. Coca Cola has 50 bottling plants in India, 15 run by Hindustan Coca Cola Beverages and the remaining 35 by local partners.
There has been a declining trend in other markets as well, like China in February and in other key markets in Asia Pacific and elsewhere in March. E-commerce is possibly the only channel where sales have not declined.
The company’s revenue declined by 1% during this three-month period and stood at $8.6 billion. The overall impact of COVID-19 may be felt in the second quarter.