Pressed hard by rising input costs, especially that of sugar, global beverages major Coca- Cola is turning towards smaller packs for its products in order to push volumes and keep pressure on margins in check.
"The (rising) commodity prices are putting pressure on our margins...We have done cost rationalisations of our products. Besides, a lot of innovations in terms of new products and different packages have helped us," Coca-Cola President and Chief Executive Officer Atul Singh told PTI.
Speaking on the sidelines of the Global Sports Summit held here, he said increasing commodity prices, especially that of sugar has "clearly impacted our cost structure".
In order to reduce the pressure on margins, Coke has come out with smaller packs for its products, which are priced slightly lower than bigger packs. For instance, it has launched its fruit drink 'Minute Maid Pulpy Orange' in a tetrapack of 250 ml priced at Rs 15 compared with 500 ml PET bottles for Rs 25.
Earlier this year, the firm also introduced its popular carbonated drink 'Sprite' in a 350 ml bottle for Rs 15, which was available in a 500 ml bottle for Rs 22.
Singh said cost rationalisation and innovative packages have helped in maintaining volume growth that the company has witnessed in the last 13 quarters.
Coca-Cola has posted 37 per cent volume growth in India during the third quarter ended September, 2009.