Coke toasts Chinese brand

02 February 2011

SHANGHAI: Coca-Cola, the soft drinks specialist, has revealed that Minute Maid Pulpy, created in China, is its first "billion dollar brand" wholly developed in an emerging market.

The US multinational previously boasted 13 products generating at least $1bn (£620m; €727m) in annual sales, a list including Coke Zero, Diet Coke, Fanta, Georgia Coffee, Powerade, Sprite and Vitaminwater.

Minute Maid Pulpy, a fruit beverage containing orange pulp, hit Chinese store shelves in 2005, and has since been introduced in 18 nations, like Algeria, Malaysia, Mexico and Vietnam.

Andres Kiger, Coca-Cola's senior director of integrated marketing communications in China, argued such a success demonstrated the significance of this outlet to the company.

"What makes this one important for us is that this was started here, in an emerging market, China, and that's a testament to China," he told Reuters.

Intelligence provider Euromonitor International predicts that the Chinese soft drinks sector will be worth $23.9bn in 2015, doubling current totals.

Marie Jiang, a retail analyst with research firm Pacific Epoch, predicted the country would also become integral in a number of further fields.

"China is going to be used as a test base for new food and beverage products, because of its huge and diverse population. If it can succeed in China, chances are it will overseas," she said.

At the recent World Economic Forum in Davos, Muhtar Kent, Coca-Cola's ceo, suggested rising levels of wealth and rising demand in developing economies made them especially attractive.

"We look at the world as a great opportunity everywhere we do business," said Kent. "Asia, particularly, is a very fast-growing area, but also across Latin America and other parts of the world."

"We are still very much at the beginning of our journey in countries like China, or Africa, where per capitas are way below world averages," he added.

"In the next decade, we're going to see a billion people around the world enter the middle class. We're going to see increased urbanisation."

Despite the challenges of the downturn, however, the organisation is not ignoring the potential offered by the US, which Kent continues to regard as a "growth market".

"One of the basic reasons is the demographics of the United States," he said. "It's the only country in the Western world that has a young population [and] a high percentage of teens.

"In fact, after China and India, by 2020 it will have the third-highest teen population in the world. The birth rate is now at par with Mexico, [and could] even pass that of Mexico.

"A population that is young, and that is diverse, is good for innovation, good for entrepreneurial spirit, and that's why we believe our future in America is very bright."

One key tool to reach customers in all locations is social media, as platforms such as Facebook and Twitter secure big audiences in geographies from North America and Western Europe to Asia and Latin America.

"It's here to stay," Kent said. "It will increasingly be more important. In the past, it was important more in the Western world, in the world that was more affluent. Now, it's a world phenomenon."

"Certainly, we see that as a very effective way of communicating [and] engaging with our consumers, and also enhancing our reputation.

"It is certainly going to have us end up with a different mix in terms of our media."

Data sourced from Reuters, Fox Business News, Bloomberg; additional content by Warc staff