CCI reentered[16] India in 1993, through a strategic alliance
with Parle Exports (Parle)[17]. The alliance gave CCI ownership of 5
popular brands of Parle (Thums Up, Limca, Maaza, Citra and Gold
Spot)[18] with a market share of around 60%, and a well-established
network of 56 bottlers.
During the period 1993-1999, CCI had three CEOs. The average
tenure of its three CEOs was around 2 years. To begin with, CCI
was headed by Jaydev Raja (Jaydev), who focused on setting up
operations in India. However, he failed when it came to
marketing. While PepsiCo was consolidating its presence, CCI
failed to define its flagship brand – Coke. In 1995, CCI
replaced Jaydev by Richard Nicholas (Nicholas). Nicholas was
successful in getting big institutional tie-ups such as
McDonald's and Domino's, but he failed in the retail consumer
market. CCI lost its market share to PepsiCo, which was surging
ahead of CCI in brand recall.
During Nicholas'tenure, CCI ran into problems with its bottlers
on the ownership issue. The bottlers were reportedly offended
when the company sent them joint venture agreements without
consulting them. As per the agreements, the bottlers were asked
to expand their capacity from 250 bottles per minute (bpm) to
1,200 – 1,600 bpm, or forego ownership of the bottling plants.
Further, the bottlers were not offered any financial assistance
for capacity expansion, creating resentment among them. Most of
the bottlers did not agree to the CCI's terms and some of them
even shifted to Pepsi.
With matters running out of hand, Donald Short (Short) was
bought in place of Nicholas in 1997. Short concentrated on
building up a strong relationship with the bottlers. Short
convinced around 38 bottlers to sell their bottling plants to
CCI. CCI bought out 38 bottlers for $700 million. Short also
took on a lot of new manpower between 1997 and 1999, increasing
the company's HR overheads considerably. The number of employees
at CCI's Gurgaon headquarters increased from 60 employees in
1997 to over 300 employees in 1999.
There was change in the top management once again in 1999, when
Alex von Behr (Behr) took over as CEO. Behr restructured the HR
and marketing functions. Under Behr, CCI invested heavily in its
distribution network. Further, the company also increased the ad
spend on the acquired brands - Thums Up, Limca and Maaza.
In the early 2000s, CCI faced stagnant sales in its cola brands,
and volumes in urban areas were stagnating. In order to expand
sales, Behr decided to diversify into the bottled water and
powdered soft drink segments in association with the Kinley and
Sunfill brands respectively. Kinley was launched in 2000, while
Sunfill was launched the following year. In 2001, CCI announced
its maiden profits from its Indian operations. |
More Classifications...
