HCCB Case Competition

Elevator Pitch

Presented by
Team Alpha, IIM Bangalore
Shivam Kumar
Nischal Mathur
Supriya Murdia
 HCCB Case Competition 2021 – HBL Beverages
Phased expansion
Phased expansion with
with optimal optimal
resource resource
allocation for marketallocation
acquisition and for market
activation acquisition
to break-even andannual
pre-pandemic activation viaeffective
turnover via effective andstrategic
and targeted targeted strategic
operational, operational,
financial, financial,
marketing and competitive marketing
strategies anddivisions (rural
across market
Our Big Idea
Our Idea & urban, occasion-wise, category-wise) and pan-India coverage
competitive strategies across market divisions (rural & urban, occasion-wise, category-wise) and pan-India coverage; break even to pre-pandemic turnover by FY2021
Market
MarketDivisions
Divisions Potential Focus Segments Research Methodology Research Insights
 Grocery stores acquisition In rural & urban markets  Primary Research –  ~50% respondents strongly prefer
Categories Occasion
followed by convenience stores acquisition Survey, Focus Group in soft drinks over hot drinks
Sparkling Drinks Away  Groceries & convenience stores activation, urban focus -depth Interviews  ~70% of non-rural respondents
Bottled Water from At Growth Potential  Secondary research – preferred personal or family pack
Juice Based Drinks Home Home Favourable Studying Food & Drink SKUs ~2-3 times a month
Disposable Income Trend
Demographics Reports for 2020 &  ~60% respondents bought soft
2024
Sales Distribution Rising per capita 2021, Fitch London, drinks for small groups whether
47 2022 145
0.4 disposable IBEF, CRISIL reports at home or going out
43 2020 123

Per Capita k
2018 income Recommendations
0 Growing
2016 Operations Strategy Occasion based Small SKUs in
Grocery Convenience Eat & Drink population
2014

INR
Hub & Spokes Model Marketing Rural Areas
Urban Rural 2012 High youth Launching small
Challenges
Challenges 32 2010 58 population Bottling plant Selling beverage SKUs of beverages
Infrastructure Rural Urban (38%, 2021) and biscuit combos in low-income
 Rural – Poor road infrastructure and city connectivity Hub
Favourable Market Share areas to motivate
 Issue in storage due to low electrification in rural areas Studies project the market share of soft drinks to steadily Stalls at buyers
Spokes events
Supply Chain & Logistics grow to ~3.5x vis-à-vis hot drinks
India - Favourable Country and Industry RRI for 2021 and fairs
 Rural – Inadequate cold storage facilities Retailers
 Difficult cross state transport due to government laws
1000000 Non- alcoholic Beverages Trend

Soft : Hot Drinks

3.6 Blue Ocean Scope
 Projected raise in taxation to increase production price
800000 3.4  Utilize the potential of increasing online modern trade market
Demand 600000 3.2  Tap the growing appetite for premium drinks in urban markets
 Rural – Low disposable income, low purchasing power 400000 3  Acquire emerging local brands to benefit from new locally
 Strong competition from local tea and coffee shops 200000 2.8 accepted tastes and to increase market share across industry
 Urban - Rising demand for low-calorie healthy drinks 0 2.6
Segmented Competitive Strategy
2018

2019

2020

2021

2022

2023

2024

2025
 Need for continuous innovation in beverage flavors
Urban Areas Rural Areas
Covid-19 Impact Pursuing Porter’s integrated Implementing a broad scope –
Increasing Urbanization
 Diminished purchasing power due to virus breakout focus cost and differentiation low-cost competitive strategy
Overall rise in nuclear families and migration to cities
 New normal of dining out would lack appeal strategy by innovating new with small SKUs to tap large
Rising demand for beverages as quality of life improves
 Residual fear to limit social contact premium beverage flavors market segment
 HCCB Case Competition 2021 – HBL Beverages
Assumptions
Turnover projection (Rural vis-à-vis Urban Revenue estimates higher
15000 10% than pre-pandemic level
Rural
• I love you I wanna kiss you and hug you tight 10000 9% Distribution Channel FY21-22E
Urban
5000 8% E&D
Rural Market
Share 0 7% Gro
FY19-20 FY20-21 FY21-22
cery
1. Table Title!!!!!!!!!!!!!!!!! Convenience
Pre-covid During Oct- Mar’21 4. Table Title!!!!!!!!!!!!!!!!!
During Apr-Sep'20
Channel Area (before Apr'20) (after strategizing) FY 19-20 Revenue (INR FY 20-21 Revenue (INR
    HBL coverage HBL coverage HBL coverage Channel Area cr) cr) FY 21-22 Revenue (INR cr)
of stores (in lacs) of stores (in lacs)* of stores (in lacs)* Grocery Urban 3840 4646 6463
Grocery Urban 16 16 16   Rural 300 363 614
  Rural 5 5 5 Convenience Urban 4680 3905 4178
Convenience Urban 1.3 1.2 0.98   Rural 300 250 328
  Rural 0.1 0.1 0.075
Eat & Drink Urban 1800 1186 1328
Eat & Drink Urban 5 2.9 3.7
  Rural 360 237 279
  Rural 1.5 0.9 1.1
  Total 11280 10588 13190
2. Table Title!!!!!!!!!!!!!!!!!! FY 19-20 Revenue (INR FY 20-21 Revenue (INR
First year Margin for newly acquired stores     cr) cr) FY 21-22 Revenue (INR cr)
Channel Area   Urban 10320 9738 11969
    Outlets acquired in FY 21-22 (in lacs) Profit Margin   Rural 960 851 1221
Grocery Urban 4 10% 3. Table Title!!!!!!!!!!!!!!!!!
% share of Rural 0.0851 0.0804 0.0926
  Rural 2.5 14% Budget allocation for Budget allocation for
Case Study Total revenue
Convenience Urban 0.29 20% Channel Area Acquisition of new Activation of new
Exhibit 3 (INR cr)
  Rural 0.04 22% outlets (INR cr) outlets (INR cr)
Eat & Drink Urban - -5% Grocery Urban 15% 200 80 6463
  Rural - 4%   Rural 30% 25 5 614
Green cells are focus groups for acquisition in first year Convenienc
Note: COGS and acquisition cost has been considered e Urban 10% 88 98 1824
  Rural 20% 8 8 328
* Refer assumptions in Annexure. References Elaborate Growth Eat & Drink Urban 5% - 0 1328
Plan