The Coca-Cola Company has teamed up with New Zealand dairy co-op Fonterra to explore new opportunities in the soft drinks category across South East Asia.

The strategic alliance – which includes three members from Fonterra and two from Coca-Cola – has already seen a new range of dairy-based products launched in Vietnam, Food Bev Media reported.

“We have come up with all the formulations using third parties to produce the product,” explained Clare Morgan, marketing director for the Asean Fonterra & Coca-Cola Strategic Alliance.

“It’s our milk powder and our intellectual property going into the recipe, but launched under a Coca-Cola brand, Nutriboost,” she told the New Zealand Herald. “We have amazing dairy know-how and they have got amazing distribution,” she added.

Nutriboost has been the leader in value-added dairy in Vietnam for several years, but with more competitors entering the category the chance to launch new products made it a good fit for the first output from the new tie-up.

While Vietnam has been the initial focus for the alliance, Morgan expects to launch new products in Indonesia and Thailand in the future as well, with Fonterra’s Anchor brand one of the channels.

Judith Swales, chief operating officer of Fonterra’s global consumer and foodservice business, noted that dairy is one of the fastest growing beverage categories in the region, with demand being driven by consumers’ increased focus on health and wellness.

“Both Fonterra and Coca-Cola are committed to disrupting and accelerating the growth of the dairy ready-to-drink category in Southeast Asia by exciting consumers with innovative new products that offer tailored nutritional benefits,” she said.

There are also practical business reasons for this approach: “Fonterra is scouting for joint ventures in which it does not need to inject capital,” observed Shagun Sachdeva, consumer research analyst at GlobalData.

“The co-op can leverage Coca-Cola’s brand name to enhance its own product line and bring desirable products which reverberate with millennials across wider Southeast Asian markets,” she told FnBnews.

Sourced from FoodBev Media, New Zealand Herald, FnBnews; additional content by WARC staff