‘Timing is right to sunset…’ – Coca-Cola top official on shutting down Bottling Investments Group – Details

‘timing is right to sunset…’ – coca-cola top official on shutting down bottling investments group – details

The Coca-Cola Company will shut down its Bottling Investments Group (BIG) on Sunday, which oversees the company's bottling operations throughout the world, including in India. This decision is poised to have direct impact on India, as BIG controls Coca-Cola India's wholly-owned bottling subsidiary, Hindustan Coca-Cola Beverages (HCCB), according to ET article.

According to internal note, which was seen by ET "The BIG corporate office will close June 30. The timing is right to sunset BIG's headquarters and to oversee our remaining bottling investments in a more streamlined way," Henrique Braun, Coca-Cola president, international development. The note said India, Nepal and Sri Lanka will be under the "oversight of its (Coca-Cola's) internal board."

According to ET reported on June 18, Coca-Cola has approached at least four prominent Indian business houses and their family offices to sell a significant minority share in HCCB in order to unlock value ahead of its initial public offering (IPO).

What is the plan?

Coca-Cola's bottling investments and operations will be managed by an internal board beginning Sunday. The board will supervise the bottling business's performance and direction.

The board will be led by Henrique Braun, which will also include top executives responsible for worldwide activities such as Monica Howard Douglas, Murat Ozgel, Enrique Rapetti, Tapaswee Chandele, and John Murphy.

Coca-Cola has recently announced a series of agreements that would considerably diminish BIG's footprint as it implements plans to gradually sell asset-heavy bottling operations in order to focus on brand creation, go-to-market, innovation, and competitive strategy, as per ET report.

Coca Cola formed BIG in 2006

HCCB sold a portion of its company-owned bottling operations in the country's north, east, and northeast in January to Moon Beverages, SLMG Beverages, and Kandhari Global Beverages, three of its current franchise bottlers. Refranchising these bottling facilities brought in $293 million, according to the company's statement. HCCB has been running 16 plants, primarily in western and southern India, since the sell-off.

Coca-Cola formed Bottling Investments Group in 2006 by combining its wholly owned bottling businesses. It had stated at the time that the goal of the consolidation was to guarantee that those bottling businesses got the right kind of funding and support.

HCCB Company financial results

HCCB's income from operations increased by 40% to Rs 12,840 crore in 2022–2023 from Rs 9,147.74 crore in the previous year, according per the most recent filings with the Registrar of Companies that the business intelligence platform Tofler was able to obtain. For the fiscal year, the business declared net profit of Rs 809.32 crore, a twofold increase over the prior year, ET reported.

Worldwide, Coca-Cola uses a combination of publicly listed and privately held businesses for its bottling operations. In 2022, the combined volume of its top five bottling partners worldwide accounted for 42% of its overall unit case volume.