One of the major regions of focus: Africa.
Coke
said in 2014 it would invest $17 billion in the continent from 2010 to
2020, a figure that tripled the amount spent in the previous decade.
In late January, the company announced its biggest overseas acquisition since 2012: A
40% stake in Nigeria’s largest juice marker, TGI Group’s Chi Ltd, which
sells beverage brands such as Chivita 100% and Chi Ice Tea, with plans
to buy the rest within the next three years.
“We
are extremely optimistic about Africa’s continued economic and social
growth and recognize the importance of ensuring we stay one step ahead
of evolving consumer tastes by broadening our portfolio and introducing
new products,” Kelvin Balogun, president of Coca-Cola Central, East, and
West Africa, said in a statement about the acquisition.
While Americans are drinking less soda, there is still plenty of room for Coca-Cola’s growth in Africa. In the third quarter,
SABMiller — a key Coke bottler in Africa — experienced
soft-drink-volume growth of 13% in Africa, with a 21% increase in South
Africa.
(Chi Ltd) Chivita 100%, Chi Ltd's 100% fruit juice brand.
In the US, per capita soda consumption by volume fell 25% from 1998 to 2015.
The
soft-drink giant is succeeding not just by marketing Coca-Cola classics
to African consumers. Coke is gaining new customers by marketing to
local tastes.
Coca-Cola
crafts products such as Sparletta Stoney Tangawizi and Krest Bitter
Lemon at micro-distribution centers and distributes the sodas to local
retailers, reports CNN. These
are beverages that can’t be found anywhere else in the world, but are
intended to make Coke the most relevant beverage producer in the area.
"The
rate of growth in Africa is higher than that of Western markets and
other parts of the world, so it'll continue to become a larger and
larger part of our revenue," Coca-Cola CEO Muhtar Kent told CNN in January.
That also means the company has to grow outside of soft drinks.
As Coke diversifies its products available in the US with options like sparkling Smartwater,
it is also working to provide non-soda options in Africa, an area where
the Chi Ltd acquisition could be a key. In addition to juice, Chi
brands include dairy beverages and snacks like sausage roll Chi
SuperBite and Muff the Muffin.
Non-soda investments
are also important due to shifting international nutrition trends. Coke
has recently come under fire for playing a role in the rise of obesity
globally. In January, the World Health Organization recommended that
governments worldwide tax sugar-sweetened beverages, similar to Mexico’s 10% tax on sugary drinks that resulted in a 12% reduction in sales of taxed items.
By
investing in local noncarbonated options as well as increasing per
capita soft-drink consumption, Coke is dedicated to becoming the drink
of choice in Africa. The company doesn’t care if new customers are
sipping juice or a Diet Coke — as long as it’s a Coca-Cola brand.
By: Kate Taylor (Business Insider); Dylan Martinez (Reuters).
Review: Emerging Market Formulations &
Research Unit, Flagship Records.
For The #FacebookTeam