Coca-Cola takes unique approach in Japan

10 July 2009

TOKYO: Coca-Cola is taking a unique approach to the Japanese market, regularly introducing a broad range of products that not only suit the needs of consumers in the country, but which could potentially be launched elsewhere.

The US soft drinks giant recorded annual revenues of $16 billion (€11.4bn; £9.8bn) in Japan last year, giving it a market share of 33%, and making the country its fifth-largest single area of operation.

However, only 15% of the company's national revenues are drawn from its main cola variant, with the remainder being delivered by a mixture of global and local products.

According to Goldman Sachs, the canned coffee brand Georgia is Coke's biggest asset in Japan, where Fanta, Aquarius, a sports drink, and Sokenbicha, a bottled green tea, also enjoy annual sales of over $1bn.

Coca-Cola sells a total of 60 brands in the Asian nation, but around 25% of its portfolio there changes each year, with the introduction of up to 300 new products in any given 12 month period.

"We've become a lab for other markets to learn from," says Daniel Sayre, president of Coca-Cola's Japan Business Unit.

Recently, the Atlanta-based firm launched an extension of Coke Plus – the name under which Diet Coke is sold in the country – flavoured with green tea, and targeted at young, health-conscious female consumers.

Its other successful products include Qoo, a non-carbonated fruit-based beverage available in pouches and aimed at children, with a Minute Maid alternative available for adults.

Furu-Furu Fanta, a "carbonated jelly" drink sold in cans – and which buyers shake before opening – was also originally targeted at teenagers.

However, when Coca-Cola discovered that 60% of purchases were being made by older shoppers, it brought out a similar product under the Georgia brand banner.

Further innovations include a new water brand, Ilohas, in an easy to recycle bottle, and a bottle of Georgia coffee that is easy hold while driving.

Data sourced from Forbes; additional content by WARC staff