 "<b>Lunch with BS:</b> Venkatesh Kini")
Nostalgia for his mother's cooking draws Coca-Cola India CEO Venkatesh Kini to Dakshin, the upmarket eatery for south Indian cuisine at the ITC Sheraton hotel in Delhi. He's hoping to roll up his sleeves and indulge his Mangalorean craving for eating crab meat from the shell. Sadly, this was a more formal lunch on thalis. Kini is the second Coke boss after his predecessor Atul Singh who can delve into the intricacies of fish and meat with ease, though Singh is passionate about Bengali cuisine.
This is Kini's third stint at Coke India, where he started as a franchise manager hired to re-launch Coke in various markets in India in 1998. But he has been on the fast track in the Coke system with long stints abroad (one for six years between 2000 and 2006) at the Atlanta headquarters, where he handled an array of assignments from heading global marketing for bottled water for about four years to heading the juice marketing business.
As we sit down at the restaurant, where we seem to be the only guests, I ask him whether he sees any difference in the perception of India in the Coke headquarters when he returned first in 2006 and then again in 2013 to occupy the hot seat. "In 2006, we were ranked 19 in terms of volumes; we were always a huge country but one that was not living up to its potential and there was no consistency in growth. In 2014, we are ranked six and the fastest-growing market and top executives are always visiting," he says with obvious pride.
An attendant dressed in a dhoti and bush shirt interrupts to take our drink orders. I choose tender coconut water. Kini's first choice, sol kadi, which he says is a great digestive, is unavailable, so the staff brings him a diet Coke, assuming that CEOs are health conscious.
Indeed, the tall, lanky young Hindu College economics graduate and IIM-Ahmedabad alumnus says it takes a lot of energy to request a normal Coke. He needs the sugar rush because he is practising every day for the upcoming Airtel half-Marathon run in Delhi.
As the drinks are served, I can't wait to ask him whether Coke has been hit by the e-commerce online bug. After all, it just launched Coke Zero cans exclusively on Amazon for a fortnight and got unexpected response. But Kini is not going overboard. He says pretty emphatically, "Based on my experience in the US, if you ask me will Amazon replace a Big Bazaar or the kirana shop, the answer is no."
He says hype and overinvestment are inevitable whenever a new retail format comes up, and that's precisely what is happening in e-commerce in India today. After a while, he predicts, the successful e-commerce retailers and modern trade will co-exist. As he points out, e-commerce has been in the US for 10 years it has not killed High Street retail. Coke, whose products come under the "impulse-buy" category will depend on e-commerce in a limited way mostly for niche, high-end products.
For our meal, Kini and I opt for the non-vegetarian thali, which has both fish korma and chicken. We add starters, rava fried fish and fish in a banana leaf.
One of the first things Kini did when he took charge as CEO was to push the 200 ml Coke bottle at Rs 10 to woo new customers. The 200 ml bottle has a long history of controversy for the company. In 2002, then president and CEO Sanjiv Gupta launched it at an extremely competitive price of Rs 5. Volumes hit the roof but profits went through the floor. Atul Singh continued with the 200 ml bottle but upped its price and never really pushed it.
Kini defends Gupta's strategy, saying it was a great way to reach consumers at an affordable price point. Retailers who never stacked a beverage entered the system when it was introduced. But the value chain of production and transportation could have been tighter. Sales were also hit by an unanticipated crisis, when a study by the Centre for Science and Environment suggested high levels of pesticides in colas. Maybe the strategy was too aggressive, he muses, but he believes it would have made money in the long run.
The hot appams on the thali are what dreams are made of and Kini, a forced bachelor (his wife, who is an accomplished classical singer, lives with his children in the US where they are studying), tells me that he loves to cook too sometimes. He also endorses the vegetarian dishes as authentic Mangalorean style in which he says you only mix sarson (mustard) and lal mirch (red chilli).
We continue our discussion on the 200 ml pricing strategy. He says his strategy is different in one key way - there are limits to the percentage of the total portfolio mix it should account for, after which prices are raised. His goal in the ultimate analysis is to ensure that one makes money on the total portfolio. Under Gupta, 200 ml accounted for more than 80 per cent of the business.
We've graduated to the fish korma, which does not strike me as extraordinary, as we discuss the issue of making colas affordable. It's tough, he concedes, because "unlike other fast moving consumer goods companies, which reduce pack sizes and keep prices at the same level, we cannot reduce volumes."
Kini has succeeded with the Rs 10-price point but he says there is no "silver bullet' in any business to reach Rs 5. The efforts have to be incremental. One solution is the "Splash Bar" - a cheaper version of a soda fountain that serves 125 ml of cola in a cup for Rs 5. He acknowledges that they have a long way to go - they have only 100 such bars and it is not a solution to reach the mass market.
I have been warned that Kini's soft-spoken, boyish charm hides a tough taskmaster, especially when it comes to cost controls. He admits to rather liking this reputation. It's a philosophy he picked up as a trainee in his first job in Asian Paints: invest in the business, reward people for results and minimise all other expenses.
Nor is he particularly enamoured with the typical CEO lifestyle. He doesn't schmooze with the celebrities who endorse Coke, doesn't have a favourite Indian Premier League team, loves football more than cricket and would love to play rather than watch a match. His one concession to luxury - though he doesn't see it that way - is an Audi A6.
The payasam is served and I am happy to break my general rule of avoiding dessert because this is a class apart. We're chatting about his predecessor. Kini has been fortunate to follow Singh, who ensured 10 years of continuous growth. Kini agrees that his mantra is evolution not revolution. So he is focussing on reducing the seasonality of business in north India, which is limited to a few summer months. He wants to introduce more products - Coke Zero is the latest and he hopes that it will become bigger than Diet Coke.
The south Indian filter coffee arrives, too hot to drink and as we wait for it to cool, he tells me about his somewhat eclectic reading habits. He used to read a lot of fiction before, but now reads the Harry Potter series with his kids (with whom he also watches Superman movies). But he also read The Third Chimpanzee by the celebrated if controversial popular science writer Jared Diamond.
As the lunch winds down, I ask Kini whether he ever worries about the increasing attack on Coke globally and even in India on health grounds, especially on social media. He has a theory. If anyone wants a global audience, and YouTube even pays for bigger audiences, they choose big brands like Coke and put up something scandalous. The advantage is they get views in 206 countries. "It's a challenge which global brands have to face and deal with," he points out.
The bill is delivered promptly and as we leave, Kini says he wants to meet soon to understand my view on "Coke Studio", the live music show that runs on TV. Only this time, he specifies, our chat will be "off the record".
This is Kini's third stint at Coke India, where he started as a franchise manager hired to re-launch Coke in various markets in India in 1998. But he has been on the fast track in the Coke system with long stints abroad (one for six years between 2000 and 2006) at the Atlanta headquarters, where he handled an array of assignments from heading global marketing for bottled water for about four years to heading the juice marketing business.
As we sit down at the restaurant, where we seem to be the only guests, I ask him whether he sees any difference in the perception of India in the Coke headquarters when he returned first in 2006 and then again in 2013 to occupy the hot seat. "In 2006, we were ranked 19 in terms of volumes; we were always a huge country but one that was not living up to its potential and there was no consistency in growth. In 2014, we are ranked six and the fastest-growing market and top executives are always visiting," he says with obvious pride.
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Has his perception of the Indian market changed? Kini, 48, says the biggest change has been in the rural markets - companies can no longer sell differentiated products as they did in the nineties, India's rural consumers want the same product as their urban brethren, only, perhaps, in different pack sizes. Infrastructure has also changed - for instance, in the nineties when he was launching Coke, Patna looked like a nineteenth-century town with few good hotels, roads and sufficient electricity to run the drink coolers.
An attendant dressed in a dhoti and bush shirt interrupts to take our drink orders. I choose tender coconut water. Kini's first choice, sol kadi, which he says is a great digestive, is unavailable, so the staff brings him a diet Coke, assuming that CEOs are health conscious.
Indeed, the tall, lanky young Hindu College economics graduate and IIM-Ahmedabad alumnus says it takes a lot of energy to request a normal Coke. He needs the sugar rush because he is practising every day for the upcoming Airtel half-Marathon run in Delhi.
As the drinks are served, I can't wait to ask him whether Coke has been hit by the e-commerce online bug. After all, it just launched Coke Zero cans exclusively on Amazon for a fortnight and got unexpected response. But Kini is not going overboard. He says pretty emphatically, "Based on my experience in the US, if you ask me will Amazon replace a Big Bazaar or the kirana shop, the answer is no."
He says hype and overinvestment are inevitable whenever a new retail format comes up, and that's precisely what is happening in e-commerce in India today. After a while, he predicts, the successful e-commerce retailers and modern trade will co-exist. As he points out, e-commerce has been in the US for 10 years it has not killed High Street retail. Coke, whose products come under the "impulse-buy" category will depend on e-commerce in a limited way mostly for niche, high-end products.
For our meal, Kini and I opt for the non-vegetarian thali, which has both fish korma and chicken. We add starters, rava fried fish and fish in a banana leaf.
One of the first things Kini did when he took charge as CEO was to push the 200 ml Coke bottle at Rs 10 to woo new customers. The 200 ml bottle has a long history of controversy for the company. In 2002, then president and CEO Sanjiv Gupta launched it at an extremely competitive price of Rs 5. Volumes hit the roof but profits went through the floor. Atul Singh continued with the 200 ml bottle but upped its price and never really pushed it.
Kini defends Gupta's strategy, saying it was a great way to reach consumers at an affordable price point. Retailers who never stacked a beverage entered the system when it was introduced. But the value chain of production and transportation could have been tighter. Sales were also hit by an unanticipated crisis, when a study by the Centre for Science and Environment suggested high levels of pesticides in colas. Maybe the strategy was too aggressive, he muses, but he believes it would have made money in the long run.
The hot appams on the thali are what dreams are made of and Kini, a forced bachelor (his wife, who is an accomplished classical singer, lives with his children in the US where they are studying), tells me that he loves to cook too sometimes. He also endorses the vegetarian dishes as authentic Mangalorean style in which he says you only mix sarson (mustard) and lal mirch (red chilli).
We continue our discussion on the 200 ml pricing strategy. He says his strategy is different in one key way - there are limits to the percentage of the total portfolio mix it should account for, after which prices are raised. His goal in the ultimate analysis is to ensure that one makes money on the total portfolio. Under Gupta, 200 ml accounted for more than 80 per cent of the business.
We've graduated to the fish korma, which does not strike me as extraordinary, as we discuss the issue of making colas affordable. It's tough, he concedes, because "unlike other fast moving consumer goods companies, which reduce pack sizes and keep prices at the same level, we cannot reduce volumes."
Kini has succeeded with the Rs 10-price point but he says there is no "silver bullet' in any business to reach Rs 5. The efforts have to be incremental. One solution is the "Splash Bar" - a cheaper version of a soda fountain that serves 125 ml of cola in a cup for Rs 5. He acknowledges that they have a long way to go - they have only 100 such bars and it is not a solution to reach the mass market.
I have been warned that Kini's soft-spoken, boyish charm hides a tough taskmaster, especially when it comes to cost controls. He admits to rather liking this reputation. It's a philosophy he picked up as a trainee in his first job in Asian Paints: invest in the business, reward people for results and minimise all other expenses.
Nor is he particularly enamoured with the typical CEO lifestyle. He doesn't schmooze with the celebrities who endorse Coke, doesn't have a favourite Indian Premier League team, loves football more than cricket and would love to play rather than watch a match. His one concession to luxury - though he doesn't see it that way - is an Audi A6.
The payasam is served and I am happy to break my general rule of avoiding dessert because this is a class apart. We're chatting about his predecessor. Kini has been fortunate to follow Singh, who ensured 10 years of continuous growth. Kini agrees that his mantra is evolution not revolution. So he is focussing on reducing the seasonality of business in north India, which is limited to a few summer months. He wants to introduce more products - Coke Zero is the latest and he hopes that it will become bigger than Diet Coke.
The south Indian filter coffee arrives, too hot to drink and as we wait for it to cool, he tells me about his somewhat eclectic reading habits. He used to read a lot of fiction before, but now reads the Harry Potter series with his kids (with whom he also watches Superman movies). But he also read The Third Chimpanzee by the celebrated if controversial popular science writer Jared Diamond.
As the lunch winds down, I ask Kini whether he ever worries about the increasing attack on Coke globally and even in India on health grounds, especially on social media. He has a theory. If anyone wants a global audience, and YouTube even pays for bigger audiences, they choose big brands like Coke and put up something scandalous. The advantage is they get views in 206 countries. "It's a challenge which global brands have to face and deal with," he points out.
The bill is delivered promptly and as we leave, Kini says he wants to meet soon to understand my view on "Coke Studio", the live music show that runs on TV. Only this time, he specifies, our chat will be "off the record".