Coke needs to deal with key Pepsi bottler in India
The Coke-Costa deal carries ramifications for the UK brand’s operations across several markets, including India, where Ravi Jaipuria-led RJ Corp, PepsiCo’s second-largest bottler globally, is the master franchise for the coffee chain. Coca-Cola will have to tackle Pepsi’s influential, multi-geography partner to stake its claim on Costa Coffee in India.
“I have just landed in Nairobi and heard about the deal on the flight,” said Ravi Jaipuria, promoter of the $1.6-billion diversified RJ Corp. “I will need a day or two to come to a conclusion.” Sources close to Jaipuria said the local food and beverages conglomerate would weigh all options after studying the details.
RJ Corp also holds the India-franchise rights for other global food chains, including Pizza Hut and KFC. In 2015, the world’s largest beer maker Anheuser-Busch InBev, the maker of Budweiser and Stella Artois beer, exited a joint venture with RJ Corp by paying an undisclosed amount to its former partner.
However, to gain control of Costa Coffee in India, Coca-Cola may decide to wait instead of doling out a hefty sum to RJ Corp, said industry experts. “Costa is big in the UK. In India, it’s very small and will be a minuscule part of Coke’s strategy,” said a senior industry executive familiar with the development. Currently, Costa operates around 50 outlets across India. In comparison, the country’s largest coffee chain Cafe Coffee Day runs over 1,500 outlets.