Competition a positive force, keeps us sharp: Coca-Cola president Murphy

Speaking to media in Mumbai on Wednesday, Murphy highlighted the strength of rural markets, the rising importance of vending, and the company’s approach to competition amid the resurgence of local brands.

India’s growth prospects and rural boom

Murphy, who visits India almost annually, acknowledged the strength of the country’s rural economy as a key driver of the company’s expansion in its fifth-largest market globally. “We are seeing strong momentum in rural markets, which presents a massive opportunity for FMCG companies like ours,” he said.

However, urban demand has remained weak over the past few quarters, which Coca-Cola sees as a temporary trend. “Consumption in developing markets does not grow in a straight line. The long-term potential remains intact, and our strategy is to continue investing.”

The US-based beverage giant sees digitization and increased accessibility as key enablers of rural growth. “I think the investments that the government has made over many years are actually benefiting the people of the country, and in turn, are creating opportunities for industries like ours,” Murphy said.

Navigating competition and market challenges

Murphy sees the rising competition from local players such as Reliance’s Campa Cola as a positive force. “Competition keeps us sharp. If we don’t have it, we get complacent. India has strong regional players as well, and they challenge us to stay at our best.”

Despite the competition, Murphy expressed confidence in Coca-Cola’s stronghold, citing the presence of legacy local brands like Thums Up, Maaza, and Limca alongside global heavyweights such as Coca-Cola, Sprite, and Fanta.

He also addressed the company’s pricing strategy, emphasizing that Coca-Cola closely monitors “magic price points” in India, particularly in the price-sensitive rural markets. “The Indian consumer is pretty elastic in what price point they’re willing to buy or not. Our focus is on having multiple packages available at different price points to meet consumer needs.”

He also acknowledged inflationary pressures but emphasized the company’s approach of balancing affordability with profitability. “One of the questions we often get is whether we want top-line growth or bottom-line growth. I want both. I want profitable growth. Part of that equation is to build a productivity muscle over time. There are always new ways to do things better and more efficiently,” he stated.

Investments in retail and bottling partnerships

Murphy highlighted the evolving retail landscape, particularly the growth of quick commerce and opportunities in vending. “In many markets, vending is a critical channel, and India is no different. Airports, shopping malls, and transit hubs offer significant potential for this segment.”

On Coca-Cola’s franchise model, Murphy reiterated its commitment to partnering with bottlers that align with its long-term vision. “We are huge believers in the franchise model, and our strategy remains consistent—to work with partners who share our ambition, have investment capabilities, and align with our values.”

Coca-Cola recently welcomed the Jubilant Bhartia Group – into its bottling system, a move Murphy described as an “important milestone” for expanding market reach. “The investments our bottlers are making reinforce their belief in the opportunity,” he noted.

The promoters of HT Media Ltd, which publishes Mint, and Jubilant Bhartia Group are closely related. There are, however, no promoter cross-holdings.

Product innovation and healthier alternatives

Addressing the rising consumer preference for healthier beverages, Murphy highlighted the success of Coke Zero (which contains no sugar) and the company’s broader innovation pipeline. “Our most successful innovation in the last 25 years, by a long shot, has been Coke Zero. We have a pretty strong record over the last 10 to 15 years of adding more low and zero-calorie variants to the core brands.”

Coca-Cola is also experimenting with new categories, though Murphy cautioned against chasing short-lived trends. “Four or five years ago, we went through a significant rationalization of our portfolio globally. I’ve become a strong believer in the power of big brands to meet most of our consumer needs.”

Sustainability and water management

Water usage has been a contentious issue for Coca-Cola in India, and Murphy emphasized the company’s commitment to sustainability. “Water is probably the number one priority for our company, both globally and in India. We achieved water positivity globally in 2016, and now our focus is on partnering locally in those areas under the most pressure.”

Coca-Cola is also working with local farmers through its Maaza and Minute Maid brands to improve agricultural sustainability. “The FMCG industry in India is part of a positive flywheel that ultimately supports farmers,” Murphy said.

AI and digital transformation

He also underlined the company’s increasing reliance on artificial intelligence (AI) across marketing, supply chain, and finance. “AI has enabled us to optimize marketing at scale, improve financial forecasting, and even predict equipment maintenance. A lot of our marketing materials are now being developed utilizing AI capabilities, allowing us to get better quality at a much lower cost.”

AI is also being leveraged for predictive maintenance in production facilities. “We now have an AI capability to produce at scale personalized materials, and we’re also using AI for predictive maintenance in our production facilities, helping us anticipate breakdowns before they happen,” Murphy revealed.

Despite economic fluctuations, Murphy remains bullish on India’s long-term potential. “We see the current macroeconomic challenges as short-term blips. India’s young population, increasing disposable income, and digital advancements make it one of the most promising markets globally.”

As Coca-Cola deepens its footprint in India, Murphy emphasized the importance of maintaining focus and adapting to local needs. “Our job is to be the preferred choice. The Indian consumer is evolving, and we must evolve with them.”