In between a highly growing shift these days to healthier drinks, the beverage giant Coca-Cola has for a while been diversifying its portfolio beyond carbonated drinks. Ten months after it splurged $5.1 billion to acquire Costa Coffee, a famous UK coffee chain, they are now eyeing the Indian global coffee players Café Coffee Day. Neither company has confirmed anything, though.
For VG Siddhartha, founder of the Bengaluru-based Coffee Day Enterprises, which runs Café Coffee Day, the primary rationale would be to pare his rising debts. Earlier this year, he sod off approx 20% stake in the information technology firm Mindtree.
However, does it make sense for Coca-Cola, primarily a bottled drinks seller, to vie with established players like Starbucks and Barista for a share of India’s coffee retail pie?
Coca-Cola is struggling to grow both in India and globally.
“The cola giants [Coca-Cola and Pepsi] have invested heavily in infrastructure but cannot keep up with the consumer preference for healthier drinks,” said Vineet Trakroo, CEO of Evolution Strategy Advisors, a Gurugram-based marketing consultancy firm. “This calls for a change in strategy, and possibly a complete overhaul of focus products in India.