Coca-Cola Revs Up Direct Distribution with Small Vehicles Across India
Coca-Cola is dramatically expanding its direct distribution network in India. The beverage giant now uses small vehicles like bicycles and electric vans to deliver products straight to retail stores. This micromobility strategy targets narrow lanes and hard-to-reach neighborhoods that larger trucks cannot easily access.
Driving Direct Store Delivery
The company calls this approach "direct-to-store" delivery. It allows Coca-Cola to bypass traditional wholesale channels and middlemen. John Murphy, Chief Financial Officer and President of The Coca-Cola Company, explained the opportunity clearly. He said walking through Indian streets reveals many outlets still not selling beverages. This presents a significant chance for expansion.
"We expect to see more traction over the next year," Murphy told Mint during a recent interview. The company is investing heavily to strengthen last-mile access, though specific financial details remain undisclosed.
Massive Physical Footprint
Coca-Cola already maintains an enormous presence across India. The company serves nearly 6 million retail outlets nationwide. Its distribution network includes 1.5 million coolers keeping beverages cold at point of sale. The growing electric vehicle fleet now exceeds 5,000 units for product distribution.
Manufacturing and distribution operations anchor through Hindustan Coca-Cola Beverages (HCCB). This entity operates 15 plants alongside multiple independent bottlers spread across the country. The beverage portfolio features mass brands familiar to Indian consumers:
- Thums Up
- Sprite
- Maaza
- Kinley
Competitive Pressure Mounts
This strategic shift comes as local competitors gain significant ground. Brands like Reliance-backed Campa Cola and Lahori Jeera have rapidly increased market share. NielsenIQ data shows their combined share in the carbonated soft drinks market doubled to nearly 15% during January-September 2025. This jumped from about 7% just a year earlier.
Consequently, the combined market share of Coca-Cola and PepsiCo declined from 93% to around 85% over the same period. This erosion impacts the incumbents' dominance in India's massive ₹60,000-crore soft drinks market. Murphy acknowledged the competitive intensity keeps the company alert and striving for excellence.
"It really reflects how attractive this industry is," he said. "It pushes us to be at our best to earn our fair share of the opportunity."
Financial Moves and Market Preparations
HCCB reported revenues of ₹12,751 crore for FY25, representing a 9% year-on-year decline. This decrease largely resulted from selling several manufacturing plants to independent bottlers in states including Rajasthan, Bihar, and West Bengal. Now the bottler prepares to tap capital markets with plans to raise approximately $1 billion through an initial public offering this summer.
Last year, Coca-Cola sold a 40% stake in HCCB's parent company to Jubilant Bhartia Group for ₹12,500 crore. This partnership aligns Coca-Cola more closely with India's extensive quick-service restaurant ecosystem, since Jubilant operates brands like Domino's Pizza, Popeyes, and Dunkin' Donuts.
Healthier Consumption Trends
The company also rides the broader shift toward healthier consumption patterns across India. Healthier and no-sugar beverage categories gain momentum through all distribution channels. Murphy noted his biggest takeaway from recent visits was the stronger presence of low- and zero-calorie options nationwide.
"Diet Coke and Coke Zero are clearly more visible across stores," he observed. "This reflects how consumers increasingly look for healthier choices."
This consumer shift receives support through innovation across categories. The company actively promotes low- and no-sugar offerings including:
- Thums Up XForce
- Sprite Zero
- Diet Coke
- Coke Zero
- Recently-launched Schweppes Zero tonic and sparkling water range
Industry Context and Strategic Positioning
Coca-Cola's micromobility push occurs as several fast-moving consumer goods companies reassess their online and direct-to-consumer initiatives. The retail landscape evolves rapidly, forcing strategic adjustments. For instance, ITC Ltd recently discontinued its standalone e-commerce platform itcstore.in, launched during the pandemic. The company now sells through third-party e-commerce and quick commerce partners to optimize distribution costs.
Quick commerce remains strategically important for Coca-Cola but constitutes a smaller part of overall business currently. Murphy described it as contributing more momentum over time while still relatively modest today. He emphasized that broader digitization of the economy creates meaningful tailwinds for their business.
The beverage and food-service industry sees increasing consolidation in India. Earlier this year, Devyani International and Sapphire Foods combined operations to jointly run more than 3,000 KFC and Pizza Hut outlets nationwide. Coca-Cola's strengthened direct distribution through micromobility represents its strategic response to these evolving market dynamics.
