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Coca-Cola announces Campbell's soup agreement

By Neil Merrett , 11-Jun-2007

Coca-Cola will market Campbell's range of vegetable-based juice brands in North America as it moves to expand its presence in the non-carbonated drinks market.

Through the agreement, Coca-Cola will become the master distributor of

 

Campbell's popular single serve beverage ranges, including the V8 vegetable juice brand, in North America.

 

 

 

Coca-Cola said it could extend the agreement to cover other key markets. Such a move comes at a crucial time for the company, as it attempts to diversify its ranges away from its traditional carbonated soft drinks.

 

 

 

Carbonated beverages are currently undergoing a decline in sales, particularly in the US, as increasingly health conscious consumers drive a shift towards juice and fruit-based alternatives.

 

 

 

Coca-Cola therefore, as the world's largest beverage producer, has stepped up its focus on this market for healthier products in recent years, with Campbell's range of vegetable juices proving particularly attractive.

 

 

 

Sandy Douglas, president of Coca-Cola's US operations, welcomed the strategy as a further sign of its commitment to meet specific consumer needs.

 

 

 

"Campbell products are a terrific addition to our portfolio," he stated.

 

 

"We have significantly strengthened our product portfolio to offer customers and consumers more options in the growing immediate consumption still beverage category."

 

 

Campbell's soup estimates that its juice brands currently account for about ten per cent of its total sales in the US, though this could well rise as demand for beverages that boast improved health benefits are expected to continue growing strongly.

 

 

 

The agreement follows on Coca-Cola's $4.1bn (€3.05bn) acquisition last month of Glacéau. This strengthened the company's position in the market for health-based bottled water products including vitaminwater.

 

 

 

Coca-Cola's shift towards a healthier portfolio could well prove prudent if it wishes to maintain its dominance in the increasingly congested North American soft drinks market.

 

 

 

During its latest first quarter results, sales of its traditional carbonated beverages within the US alone dropped three per cent. The company attributed the decline to changing consumer tastes.

 

 

 

Coca-Cola has already collaborated with Campbell's, in the launch last year of Godiva Belgian Blends range of coffee-based beverages.