Download - The Coca-Cola Company Group 5 Shirkara Jackson Siromik Jackson Monday, September 15, 2008
Team 5: Coca-Cola
Coke’s Juicy China Deal!
• “Coca-Cola has announced a $2.4 billion takeover of China Huiyuan Juice, giving it a big boost in the fast-growing market for noncarbonated drinks.”
-BusinessWeek
Team 5: Coca-Cola
Coca-Cola Quick Facts• Founded in 1886 by Dr. John Pemberton.• Consumer servings per day total 1.5 billion.• Employs 90,500 people worldwide.• Products reach more than 200 countries:
1-U.S
2-Mexico
3-Brazil
4-China• Beverage variety of more than 2,800
products.
Team 5: Coca-Cola
Coke’s Most Popular Brands
Soft Drinks
Energy Drinks
Juices
Sports DrinksTea & CoffeeWater
Team 5: Coca-Cola
Coke Identifies An Opportunity…
• With a 9.7% market share in the juice segment, Coca-Cola identified an opportunity to increase their market share by acquiring their industry rival, China Huiyuan Juice.
• Huiyuan Juice Group’s is 10.3%• Thus making Coca-Cola #1 in
China’s juice industry with a 20% market share.
Team 5: Coca-Cola
China Huiyuan Juice's Appeal To Coke
• Huiyuan Brand is the leading brand in China’s beverage industry.
• Controls 46% of the pure juice market share and 39.8% of the nectar market share.
• Products are exported to more than 30 countries and regions including:
-USA
-Japan
-Australia• Have developed and produced more than
500 products in the last 15 years.
Team 5: Coca-Cola
China’s Massive Thirst• “Carbonated soft drinks are in decline in
China, and native tastes prefer juice. It’s going to be a growth sector.”
-Matthew CrabbeManaging Director for Access Asia
• The market demand for fruit and vegetable juice in China totals 2.6 billion gallons, compared to 2.3 billion gallons of soda.
• In dollar terms: Juice vs. SodaJuice sales total $12.3 billionSoda sales total $8.6 billion
Team 5: Coca-Cola
A Happy Match
• China Huiyuan is the right target for Coke because of the Chinese company’s strength in segments where the American company is weak.
• This acquisition gives Coca-Cola a big advantage because China Huiyuan is definitely the leading company in fruit and vegetable juice.
Team 5: Coca-Cola
Company Chairman & CEO“This partnership with Coca-Cola will further develop the Huiyuan brand in a competitive global beverage market and provide a larger and more competitive platform for Huiyuan’s business and employees.”
Huiyuan Chairman Zhu Xinli
“This deal will provide a unique opportunity to
strengthen our business in China, especially since the
juice segment is so dynamic and fast-growing in China .”
Coke President & CEO Muhtar Kent
Team 5: Coca-Cola
Facing An Uphill Battle…..
• Winning the O.K. from government regulators looking to enforce the new Chinese anti-monopoly law.
• Market saturation• Figuring out how to build on the
two companies’ combined 20% market share in juices.
“There are still loads and loads of companies all competing in the same market. It’s highly inefficient, and nobody is making a really good profit.”
-Matthew Crabbe