India’s $0.07 cup of Coca Cola

Coca Cola now serves more than 1.5 million cups of its famous beverage daily in India through its splash bar program.

(Diya TV) — India is where you’ll find the world’s cheapest cup of Coca Cola, according to the company’s president and chief operating officer James Quincey.

A cup of Coke in India — or Sprite, or Thums Up — sells for Rs5 in the rural western state of Gujarat and is the “cheapest, most accessible Coke you can probably buy in the world,” Quincey said to investors at a meeting earlier this month.

The inexpensive drink speak to the company’s testament of being focused on India’s rural market, which is home to 67 percent of the country’s total population. India represents Coke’s sixth-largest market globally, and “a lot of the focus is on affordability,” Quincey said, speaking during a Deutsche Bank global consumer conference call.

The innovation currently underway in the country — where the per capita consumption of the beverage is among the world’s lowest — could potentially help the company further penetrate surrounding and similarly developing markets, Quincey said.

“There is a whole set of markets around the world where the trend of income inequality continues to play out and where the necessity becomes to move from the middle to more premium offerings and more affordable offerings,” he said.

Consumer companies such as Coca Cola rely heavily on lower price points for country’s such as India, where the average daily household incomes are just under $2.50. In 2014, Coke began exploring a pilot program named “splash bar,” a kiosk where the vendor dispenses small, 80-150ml cups of Sprite, Thums Up, or Fanta, starting at Rs5. The program began in rural Gujarat with 31 bars, and eventually evolved to 30,000 splash bars, selling over 1.5 million cups daily, a company spokesperson said.

It’s an experiment the company had once undertaken in the past — in the early 2000s, Coke launched a 200ml bottle named Chhota Coke priced at Rs5. The program was suspended in 2006 due to the price point of transportation and packaging costs. A 200ml bottle now costs Rs12, or $0.18.

Coke is also venturing into other territories, including investing in technology. It is testing a new polyethylene terephthalate or PET packaging that increases the drink’s shelf life. “So, this is a way of really being able to extend the reach way further into the rural areas,” Quincey explained.

The play in India comes just as the populous is taking a turn towards more healthy beverage options, such as juices and fruit drinks. The beverage maker, therefore, has been diversifying its portfolio accordingly.