Coke loses fizz in first quarter

India does not figure among the markets that have driven growth for Coca-Cola for the quarter ended June 30, 2004. The quarter coincides with the summer season in the country when the thirst driven consumption of soft drinks is at its peak.

It is noteworthy that Coca-Cola India had got the prestigious Woodruff award in 2002 for being the fastest growing Coke arm in the world.

On the other hand, rival PepsiCo reported that it's 14 per cent growth in beverage volumes in the Asia-Pacific region during the same quarter were primarily driven by the strong double digit growth in India and China.

In its second quarter earnings results declared recently, Coca-Cola said that its worldwide unit case volume increased one per cent in the second quarter and two per cent in the first six months of 2004.

The key contributors to the volume growth were North America, China, Brazil, Argentina, South Africa and Turkey which partially offset the decline in Germany, the Philippines, Mexico and Indonesia.

Interestingly, Alex Von Behr who was replaced by Sanjeev Gupta as the president of Coca-Cola India, is currently heading the operations in the Philippines.

Coca-Cola India had maintained that its new affordability has yielded strong double digit growth and the pricing model was being exported to other countries such as China and Indonesia.

But despite missing a mention alongside the high growth markets, Coca-Cola India is not among the problem areas for the cola major. Last month when Coca-Cola's new CEO Neville Isdell concluded his visit, he even issued a statement saying he was happy with the performance of the Indian arm.

During the quarter, Coca-Cola's gross profit increased by 10 per cent and operating income grew by 13 per cent. Its earnings per share (EPS) increased 18 per cent to $0.65 during Q2, 2004, compared with $0.55 in the corresponding period last year.

In its results for the quarter, Coke said that its strong performance in Asia was driven by Japan, China and Australia, and currency benefits. Volumes in the region grew by four per cent, but here too India does not find a mention.

"Strong profit growth in China continued, driven by unit case volume growth of 37 per cent during the quarter. Trademark Coca-Cola increased unit case volume by 33 per cent, with robust growth in single-serve packages enhanced by both the continued emphasis of affordability and an under-the-crown promotion. Sprite, Fanta, Nestea and Qoo also enjoyed strong unit case volume growth in the quarter," Coca-Cola said.