SLMG Beverages Eyes Price Hikes Amid Rising Packaging Costs and India's Booming Soft Drink Market

SLMG Beverages, Coca-Cola's largest bottling partner in India, may be forced to increase prices on select products as escalating packaging costs — driven partly by the ongoing Middle East conflict — put pressure on its margins. Deputy CEO Rahul Kumar revealed that expenses tied to plastic bottles, caps, labels, and cardboard packaging have been climbing steadily, with some water brands already passing these costs on to consumers.

Kumar noted that any price adjustments would hinge on competitor behavior and consumer sensitivity, emphasizing that a portfolio-wide price increase has not occurred in nearly eight years. The company is expected to revisit its pricing strategy in April. This decision comes at a particularly challenging time, as the Indian beverage market faces intensified competition following the 2023 relaunch of Campa Cola by Mukesh Ambani's Reliance Industries. Leveraging an extensive retail network and a wave of local brand sentiment, Campa has ignited a price war that leaves little room for major players to raise costs freely.

Despite these challenges, industry analysts remain optimistic. Redseer Strategy Consultants projects India's non-alcoholic ready-to-drink market could nearly double to around $40 billion by 2030, with increased competition actually drawing in new consumers and expanding the overall market.

To capitalize on this growth, SLMG — responsible for over 22% of Coca-Cola's total India volumes — has announced plans to build four new manufacturing plants over five years, investing between ₹10 billion and ₹12 billion per facility. The company's financials reflect strong momentum, with sales surging 49% to ₹67.73 billion and net profit jumping 76% to ₹2.06 billion in fiscal year 2025. SLMG is now targeting ₹100 billion in net revenue by 2026–27, focusing expansion efforts on high-potential, lower-income states like Bihar and Uttar Pradesh where rising incomes and low consumption levels signal significant untapped demand.