Summer is in full swing in India. And what better time to indulge in some cold soft drink than now? Of course, you could go for a healthier option, but nothing can quench the need for a cool Coke Thums Up, Sprite, or Pepsi if you’re feeling really crazy and a Diet Coke if you want to ‘feel’ healthier.
So, of course, you go on your Blinkit app, or maybe walk all the way to your local store to get a can of Diet Coke, and suddenly all your dreams of having a nice chilled drink come crashing down when you see that there is nothing there.
The shopkeeper says there is no stock, or the app tells you it’s all “sold out” and to notify you when it comes back. This is not some random scenario cooked up, but a reality that many across the country are experiencing due to a very real shortage of Diet Coke.
Yes, several Indian cities, including Mumbai, Delhi, Pune, Bengaluru and more, are witnessing a crisis of Diet Coke, to the point where supermarkets have reported running low or completely out on the product.
But why is this happening, and why is it specifically only being noticed for Diet Coke?
Why Diet Coke Specifically Was Hit The Hardest
Over the past few days, several reports have come out addressing the crisis around Diet Coke.
A leading grocery retailer in Delhi-NCR, speaking to Goodreturns on the condition of anonymity, described the ground reality, saying, “We are facing acute Diet Coke stock-outs since the weekend. If supplies do come, they are being immediately picked by consumers.”
Several supermarkets, local stores, across major metros like Bengaluru, Mumbai, Pune, and Ahmedabad and more are reportedly having a very low supply of Diet coke. Meanwhile, quick-commerce platforms like Blinkit, Swiggy, Instamart, and Zepto either have limited or no stock available at their urban centres.
The reason for this, as with many things these days, can be traced back to the US-Israel and Iran war that started in February this year.
Along with that, the new quality control rules introduced by the Bureau of Indian Standards (BIS) have also led to a slowdown of the supply and manufacturing of aluminium cans, a very important part of the Diet Coke product.
Furthermore, the reason Diet Coke has been hit the hardest in all this is due to its packaging. Where Coke, Thums Up, or Pepsi also come in PET and returnable glass bottles, Diet Coke is still largely available only in cans in India.
The shortage of cans, therefore, hits Diet Coke harder than other fizzy drinks, even though this supply crunch is not limited to just one brand. Instead, it is hitting the entire ready-to-drink market, including beer and other canned beverages.
A leading bottling partner was quoted by Goodreturns, explaining this as, “While can shortages are impacting all soft drinks, the reason why Diet Coke is seeing a shortage in particular is because of a combination of factors. It is the fastest-growing diet drink in the country by a significant margin.”
Read More: The Iran War Is Inside Every Indian Kitchen Right Now
Grocer Ashish Saxena in northern Uttar Pradesh, speaking with Reuters, said, “Earlier, orders were delivered within five-six hours. The company is now pushing for Coke Zero which comes in a plastic bottle and is very reasonable when compared to other products.”
Sanjay, a distributor also stated to the news agency, how “We’ve been placing orders but have been told there is a shortage due to war.”
An industry insider also revealed how “There is some production happening, but it’s being rationed as the company can’t meet all the demand,” adding that due to an energy shortage in India, production of cans and bottles has become expensive and delay in the import of cans.
The Can Itself Is the Problem
The biggest reason behind this shortage is a crunch in aluminium cans. Now, this shortage is due to two reasons, one domestic and one geopolitical.
The domestic reason comes from the Bureau of Indian Standards (BIS), which introduced mandatory certification for aluminium cans through a Quality Control Order (QCO) last year in April.
This was part of India’s push to standardise products and reduce substandard imports on a country-wide scale. However, this ended up slowing the approval of domestic production and imports coming from overseas and ultimately delayed the manufacturing.
The compliance requirements also led to imports facing delays, which led to the supply and demand rate going out of balance, something that is not ideal during a time when the consumption of canned beverages was rising sharply.
So, essentially, while the regulatory intent was good, the execution, however, created problems in the production, import and manufacturing sectors that cannot be quickly or easily fixed.
Industry insiders have also reportedly revealed that local can makers like Ball Beverage Packaging and Canpack are unable to bridge the gap this has created.
Executives, on the other hand, have said that new domestic production setup will require at least 10 to 12 months with these new rules as they do not already have sufficient aluminium beverage can capacity.
This has led to a significant dependence on imports to manage the demand for canned drinks.
The second reason is geopolitical, specifically the crisis between the US, Israel and Iran. The disruption in the Strait of Hormuz has affected practically every industry in the entire world, and aluminium cans are one of them.
According to reports, around 9% of the global aluminium production comes from the Gulf.
The conflict and closure of the chokepoint has severely disrupted the shipping routes through which a significant portion of global aluminium and aluminium cans reaches India.
The liquid is still being brewed in Pune, but the metal to hold it is stuck in the Middle East. The Strait of Hormuz closure has paralysed aluminium exports, driving prices to $3,500 per tonne.
The aluminium supply chain itself has been under pressure globally, with fluctuations in metal availability and pricing affecting how quickly cans can be produced and shipped.
Other things adding to the difficulty are currency fluctuation, which has made aluminium expensive for certain markets, while the inventory levels of companies have been hit by broader supply chain disruptions.
A senior executive at a global beverage maker was quoted by TOI, saying, “Supply constraints are worsening, especially for aluminium cans and LPG used in glass manufacturing furnaces, forcing some units to either operate at just one-fourth of their capacity or shut down temporarily.”
Nick Snowdon, head of metals and mining research at commodity trader Mercuria, told Reuters, “The scale of the supply shock we’re seeing in the aluminium market is probably the largest single supply shock a base metals market has suffered in the post-2000 era,” adding that“We are already in a ‘black swan’ event. No one could have foreseen something on this scale.”
Companies are now turning to overseas suppliers to keep Diet Coke and other canned products flowing. Firms are importing aluminium cans from the UAE, Sri Lanka and Southeast Asia, which industry executives say are at least 25 to 30 per cent more expensive.
These regions normally provide about one-third of India’s aluminium can needs, thanks to their bigger and lower-cost manufacturing bases.
Image Credits: Google Images
Sources: Reuters, Business Standard, Mint
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This post is tagged under: Diet Coke, Diet Coke shortage, Diet Coke shortage India, Diet Coke india, Diet Coke price, Diet Coke price in india, Diet Coke can, Diet Coke can shortage, aluminium supply, aluminium supply shortage, global aluminium supply, us iran war, strait of hormuz, us israel iran war, Strait of Hormuz closure, iran war
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