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Coca-Cola's aggressive push in China
23 November 2009 03:26 am
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Coca-Cola, the world's largest soft drinks company, is planning to more than double its number of bottling plants in China over the coming decade as part of the group's aim to triple the size of its sales to the country's rapidly emerging middle class.

Doug Jackson, president of Coca-Cola's China business unit, said the company also planned to distribute more than six times as many Coke-branded coolers to retailers, bars and restaurants in China over the coming decade, employing an expanded sales force to reach an additional 4.7m outlets.

"We are going to grow ahead of the rate of the industry," he told investors in Atlanta last week, noting that China's sales of non-alcoholic packaged drinks were expected to triple to 30bn cases by 2020.

Coca-Cola's plans to expand in China are a central part of its push to double revenues -- and those of its bottlers -- from almost $100bn (€67bn) now to $200bn over the next 10 years.

Coca-Cola executives say they expect 60 per cent of the new growth to come from China, India and other emerging markets, with only 15 per cent from developed markets.

China, already Coca-Cola's third-largest national market by revenues, has an average per capita consumption of 28 Coca-Cola products per year -- on a par with poor African countries and well below the 199 per capita of Coca-Cola products drunk last year in Brazil.

Without giving numbers, Mr Jackson said there would be "significant" and "substantial" investment in bottling plants and in the new cold drink coolers that have traditionally been used by Coca-Cola to drive sales expansion. The drinks group is planning to increase the penetration of coolers from about seven per 10,000 people to about 40 by 2020, which would still be below the levels of 50 to 60 per 10,000 seen in Latin America.

Coca-Cola is the largest soft drinks brand in China, with almost 15 per cent of the packaged beverage market, although it trails local competitors in tea and juices. Its volume sales in China are about double those of PepsiCo, its global rival.

Mr Jackson also said that he expected Coca-Cola's Vitamin Water brand, launched this month in Beijing and Shanghai, to be one of six Coca-Cola brands with annual sales of more than $1bn by 2020.

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