The thirst for profit is undimmed. But now it’s diluted by water woes

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New fizz Atul Singh says Coca-Cola will become water-neutral this year
New fizz Atul Singh says Coca-Cola will become water-neutral this year

For one of the world’s biggest brands to be able to operate successfully in one of the world’s largest markets, water is a crucial ingredient. Coca- Cola India and South West Asia CEO Atul Singh has kept this in focus as part of his bargain with the bottlers, encouraging them to be water-neutral so that the multinational — often chided for drawing excessive water in the subcontinent — could achieve growth without controversy. In Shanghai for meetings with his bottlers and the India advisory board, he told SHANTANU GUHA RAY that his water-neutral call will be an important driver in the Indian market, where Coca- Cola grew by nearly 31 percent in volume last year. Excerpts:

Is the water-neutral policy driven by criticism that Coke draws more water than it needs?
That criticism is completely out of place. India is primarily an agrarian economy and agriculture, the main occupation, draws 80 percent of the available groundwater. This calls for sustainable water management practices in agriculture. At the same time, water is vital to our business. We have a shared interest in our water resources, and that is why one of our goals is to safely return to communities and nature, an amount of water equivalent to what we use in our products and their production. Let me share some figures with you. At the end of 2008, we used 6.18 billion litres, and now our goal is to replenish all that we use. At the end of 2009, we had created rainwater harvesting potential equivalent to 93 percent of the groundwater used in our operations. We are on track to reach a net zero balance with respect to groundwater usage in 2010.

That sounds like a tall claim… 
No, it is not. We have been partnering with various government agencies, NGOs and communities to combat water scarcity and depleting groundwater levels with simple and effective solutions. And this work has nothing to do with our plants. At the moment, we have over 600 such projects, spread across 20 states, and are in partnership with government agencies and local communities. We must find new solutions for water management and leverage traditional avenues to conserve water, like baoris (stepwells), check dams and restoration of ponds and lakes. We have restored baoris in Rajasthan, ponds in Uttar Pradesh, Gujarat and Karnataka and reconstructed check dams across Maharashtra and south India.

Is that what you call inclusive growth? How much of that is actually happening?
It is, by all means, the key to future growth. Let me cite the example of China because we are in Shanghai. In this mainland, inclusive growth is imperative for all FMCG (fastmoving consumer goods) firms because till they grow, your business cannot. There’s a need for affordable innovation to spur such growth. In India, we are constantly trying to create a new model to provide solutions for those at the bottom of the pyramid.

We must leverage traditional avenues to conserve water, likebaoris, check dams and lakes

There seems to be a shift from colas to health drinks now…
The slow shift to health drinks, fruit-based and milkbased drinks is the future. We’ve had clear growth for the past 16 quarters and double- digit growth in 13 of these. We have to continue such innovations. The aloe vera-based drink is doing well in China while the mangobased Maaza is driving the Indian business. We tasted profit in 2009 for the first time since re-entering India in 1993 after 16 years.

While Coca-Cola uses the cola brand to drive market share in other countries, the top three products in India by sales volume are Kinley bottled water, Thums Up and Sprite, according to Euromonitor. Mirinda ranks fourth while the Coca-Cola brand is No. 5.

Photo: Shailendra Pandey

shantanu.guharay@fwtehelka.com

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