Coca-Cola aims to boost brands in China

24 November 2009

BEIJING: Coca-Cola, the US soft drinks company, is hoping to ensure that at least four of its brands deliver annual sales of $1 billion (€668m; £601m) in China by the end of the next decade.

As previously reported, Coke has stated an ambition to double its total revenues to $200bn by 2020, with 60% of this growth slated to come from emerging markets like China and India.

Over the last half-decade, the Atlanta-based firm's sales levels in the world's most populous nation increased by 19% on an annual basis, and it is now aiming to treble its totals in the country by 2020.

At present, the beverage giant estimates its sales in the fast-growing economy are double those of PepsiCo, helped in particular by its broad portfolio of products, covering everything from juices and dairy drinks to still drinks and water.

This equates to a consumption level of 28 items per person each year in China, compared with 199 in Brazil, another key target area for the organisation.

Overall, Coca-Cola predicts that the Chinese non-alcoholic packaged drinks sector, which is currently its third biggest global market, will increase in size to over 30 billion cases over the next 11 years.

Coke and Sprite already generate $1bn in sales in China each year, with Yuan Ye, its tea product, and Ice Dew, the bottled water, scheduled to reach this benchmark by 2020.

Earlier this year, the American multinational saw its efforts to purchase the Huiyuan Juice Company, the biggest domestic player in this segment, blocked by the Communist authorities.

However, it has committed to investing $2bn in the BRIC country over the next three years, and sponsored the Beijing Olympics in 2009, as well as taking a pavilion for the 2010 World Expo, which is being held Shanghai.

Muhtar Kent, chief executive of Coca-Cola, further argued that consumers are still positively embracing American brands.

"Everyone's walking around with Nikes, and drinking Coke and (wearing) Oakleys," he said. "I think there's a difference between that and the view of the US – people don't worry at a consumer level, at a brand level."

Coca-Cola recently launched Glaceau water in China, as well as Minute Maid Super Pulpy Milky, with further new offerings likely to follow in the future.

Data sourced from Financial Times; additional content by Warc staff