rigade Magnum. &-Wing. 7, 8°, & 9" Floor, Bellary Road, B Kodtgehalli Gote, Bengaluru 560 092, Karnataka, INDIA Case Study for Round 1 of HCCB Case Challenge Season 1 The non-alcoholic beverages market in India is approximately valued at INR 28,000 Gr and growing at a CAGR of 5-7%, on a more or less stagnant sparkling drinks demand and 15-16% CAGR of juices and juice based drinks. Sparkling drinks are majority and account for approximately INR 18,000 Cr, while juices account for the other INR 10,000 Cr. The growth in the industry has been driven by increasing affordability and higher consumption of fruit juices and fruit based drinks. One of the reasons India growth would be robust for at least a decade is that India's market, size by population is large and affordability is increasing with growth in economy and the fact, that India has one of the lowest per capita soft drink consumption in the world. India’s per capita consumption of approx. 70 bottles per annum is very low compared to 1500 bottles in US, 1200 bottles in Germany and 550 bottles in Brazil Besides these, bottled water is another very big category and is estimated at approx. INR 16,000 Cr excluding the bulk water purchases for restaurants and households. The two main players HBL Beverages and PCL India account for almost 72% of the total market with HBL Beverages holding a 52% market share. However, there is resurgence of some local brands like Bovonto, Jayanti Cola, Soyso, Runner and Kashmira) (24% market share), which are able to deep distribute locally, thereby gaining shares. One of the main challenges of this industry is to achieve deep distribution in rural areas. In 2020, the onset of pandemic suddenly changed the operating realities of the market with huge change in consumption behaviour. HBL Beverages - Scenario Today HBL Beverages is the largest pure play beverage distribution company of India, having 52% of India's NARTD (Non- Alcaholic- ready to Drink) volume and is distributing in close to 53% of India’s districts. Its brands “Cola Refresh” and “Mango Magic” are India's TOP 2 FMCG brands, HBL enjoys a leading market share of 52% in NARTD, with leadership across categories — Sparkling, Juice and Water. The presence of HBL is strong in both General Trade and Modem trade. In General trade the key channels are - Grocery, Convenience and Eating & Drinking (E&D- covers all avenues where consumers eat out-restaurants, bars, bakery elc.) In the year 2020, HBL was paving the way for a winning year with a 15% revenue growth until an unexpected wave of COVID-19 hit HBL and then growth started slowing down , eventually trending towards negative. Impact on HBL’s business dynamics 1. Traditionally HBL’s business has always been skewed towards “Away from home / Out of Home" occasions with 70% of business coming from the “Away from Home" occasion. Occasions are the moments when a consumer consumes the beverage. The major occasions. are (a) Away from Home and (b) At Home (In Home). Packs are also segmented similarly with the immediate consumption (IC packs) - all the small SKUs; On the Go (Mobile Packs) and at Home (the large packs). www.heeb.in Follow Us on: OGOen —EEEeeeeeeeeeSSSSSSSaaQaQ808.....Q° rigade Magnum. &-Wing. 7, 8°, & 9" Floor, Bellary Road, B Kodtgehalli Gote, Bengaluru - 560 092, Karnataka, INDIA In the current situation the occasion mix is shifting from Out of Home to ~ > At Home sub occasions’ growth as below: Emerging At-Home Occasions Fatingameal/Snack 24% “f Watching TV 2% Fun with family 12% t S Work 2% Table 1 2. With consumers staying at home, and more believing in stocking up on essentials for the pandemic, Grocery has emerged as a key channel. The Grocery channel has seen the fastest acceleration along with Modern Trade and Pharma, HBL’s channel mix has also seen considerable shift from Eating and Drinking (E&D) to Grocery. This is in line with Occasions shift from “Away from Home” to “At Home”. The salience shift is as below: Table 2 3. Further, HBL has always had the belief that execution is key and believes in market activation to facilitate selling. By definition, Market activation would mean all the activities- execution of an outlet store which helps shopper / consumer connect with the brands and trigger purchase decisions. cooler Banding me = eval Manges racks She estos www.heeb.in Follow Us on:rigade Magnum. 8-Wing. 7, 8, & 9° Floor, Bellary Road, [ { B Kodigenalli Gate, Bengolurs - S60 092, Karnataka, INDIA Since beverages is an impulse category it is extremely important to entice the shopper / consumer with occasion based messaging’ and the right marketing element™ + An occasion based messaging* is the key message communicated to a consumer visually, through a marketing element™* owing to which a consumer engages with the brand frequently. + For example the communication of a “ Food with beverage “occasion at a restaurant ona menu card In fact, there has been a positive co-relation between activation and sales. For example, an outlet which has combo boards (Food+ Beverage offer) sees 24% more growth in soft drink sales vs an outlet which doesn't have a combo board. The Task at Hand Table 3 gives the construct and dynamics of the non-alcoholic beverages market excluding bottled water. This has been constructed after analyzing sales and distribution data. Pont of consumption dynamics pre pandemic sste/consumtion owes ndurty |Coverag[ske/out Sale/outaequstiofpresure | Average activation cstv Soles pote ott [coverage efi fee facto incense aera concer sl orsonoton Don [cot of esurngs row port seeonsampton] | algerie ator Raat comonton nee cert of Seton Ba Table 3 Points to consider: 4. The company has earmarked 2% of its tumover towards activation 2. Additionally 3% of its tumover has been earmarked towards acquisition of new outlets 3. Table 3 is the scenario pre pandemic and the changes in the market post pandemic has been illustrated in Table 1 & 2 www.heeb.in Follow Us on: OGOenrigade Magnum. &-Wing. 7, 8°, & 9" Floor, Bellary Road, B Kodtgehalli Gote, Bengaluru - 560 092, Karnataka, INDIA Deliverables: What should HBL Beverages do in the changing consumption scenario during and post covid? You are part of the commercial team at HBL beverages that has to formulate the strategy for increasing revenues back to and beyond the pre pandemic levels Using the available information and any primary and secondary research that you may like to Conduct, provide the management with clear and supported inputs to answer the following questions Quaitative inputs on the kind of packs to be focused on and in which segment? 2. How to expand and acquire maximum business impact outlets, given the shifting nature of sales point and consumption? 3. Study competition activities and recommend strategies to counter them 4, What is the best way to use the available activation and acquisition budget to maximize the revenue? 5. This would include quantitative inputs on which segments to focus on and how much of the budget? 6. Recommend strategies to enhance the impact of activation budget through innovative activation ideas As a first step, you are required to submit a 2 slide, excluding cover page, elevator pitch (as per the details mentioned at htlos://www.aradpartners.n/e/HCCB-India-Case-Challenge- to the evaluating team to get an idea of your understanding and direction of your strategies. Top 20 teams qualifying Round 1 would be further assigned with the task of formulating the detailed plan, Allthe Best! www.heeb.in Follow Us on: OGOen —EEEeeeeeeeee