- Coca-Cola lost market share in India in Q2 due to rising raw material costs
- Aluminum and PET price surges led to higher prices and packaging shortages
- Strait of Hormuz shipping disruptions worsened aluminum can supply crisis
Coca-Cola is facing a tough quarter in India, officially losing market share in Q2 as a combination of soaring raw material costs and geopolitical supply chain bottlenecks take a toll. A sharp, unexpected surge in the prices of aluminum and PET plastic has forced the beverage giant to hike its prices while grappling with severe packaging shortages.
The squeeze on aluminum cans-worsened by commercial shipping disruptions in the Strait of Hormuz due to the ongoing Middle East conflict-has been so severe that it sparked a supply crisis for Diet Coke, triggering unusual waves of panic buying and "Diet Coke parties" across the country.
To bridge the gap, Coca-Cola has been forced to import pricier, larger 330-ml cans from Southeast Asia to replace its standard 300-ml offerings, raising prices by over 10% in the process. The higher costs have also exposed pricing gaps in the company's mid-tier packaging portfolio, making it temporarily less competitive in a highly price-sensitive market.
Despite the immediate pressure and the scramble to revamp its pricing and packaging strategies, Coca-Cola leadership remains optimistic about its long-term runway in India, projecting that Diet Coke sales volumes could still grow tenfold this year despite the current supply hurdles.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.