SLMG Beverages, the biggest Coca-Cola bottling operation in India, is warning that persistent Middle East conflicts could force the company to increase product prices due to rising costs for packaging materials.
The ongoing warfare has driven up expenses for essential packaging components including plastic containers, bottle caps, product labels, and cardboard packaging materials. Some bottled water companies have already implemented price hikes in response.
“If the war continues, the packaging material cost may continue to move up,” said Rahul Kumar, deputy CEO at SLMG, during an interview conducted earlier this month. Kumar noted that any pricing decisions would consider competitor actions and customer response to potential increases.
These cost pressures emerge as billionaire Mukesh Ambani’s Reliance Industries launched a revived version of historic Indian cola brand Campa in 2023, leveraging its extensive retail presence and appealing to nationalist feelings to spark aggressive pricing competition.
Kumar explained that the intensely competitive carbonated beverage sector, featuring numerous national and regional brands, offers minimal flexibility for price adjustments. The company has avoided broad-based price increases for approximately seven to eight years.
SLMG plans to conduct a pricing review during April, Kumar announced.
Despite competitive challenges, Kumar believes increased competition will expand India’s soft drink market by attracting new customers. Research firm Redseer Strategy Consultants projects the nation’s non-alcoholic ready-to-drink beverage sector could reach approximately $40 billion by 2030, representing a doubling in size.
To capitalize on this projected growth, SLMG—which handles over 22% of Coca-Cola’s Indian production volume—intends to invest 10-12 billion rupees ($106.58 million) in each of four new manufacturing facilities planned over the next five years.
The bottling company reported impressive financial results, with sales increasing 49% to 67.73 billion rupees in fiscal 2025, while net profits surged 76% to 2.06 billion rupees, according to business database Tofler.
SLMG has established a goal of achieving 100 billion rupees in net revenue by 2026-27, focusing expansion efforts on densely populated but lower-income Indian states including Bihar and Uttar Pradesh. The company expects low current consumption rates and improving household incomes in these regions to generate increased product demand.
