Bud maker and Coca-Cola pursue soft drink expansion

Coca-Cola bracing for Chinese juice challenge​

Coca-Cola is likely to face new Chinese antitrust legislation after it last week announced its intention to acquire the country’s Huiyuan Juice Group to expand its focus on emerging markets for fruit juice products.

News reports suggest that the company will provide the sternest test yet for the amended legislation, with the future of one of China’s largest beverage groups at stake.

Coca-Cola itself appears to be acting in line with recent strategies to diversify its portfolio away from its core carbonated beverage brands

The Coca-Cola Company announced in July that half years sales were up by 19 per cent to $16.4bn, as a focus on cost saving and non-carbonated beverages helped push global sales volumes.

The company said that it had posted strong growth within its portfolio of non-carbonated drinks such as tea and juice-based beverages and bottled water brands with combined unit volume up 13 per cent for the six months ending in June.

It is on the back of this potential that Coca-Cola announced last week that it would attempt to make an all cash offer for Huiyuan, following similar moves in Russia.

The company says that should it be successful with the offer, which amounts to $2.4bn, Coca-Cola will combine its own distribution and material sourcing operations with Huiyuan’s knowledge and presence in Chinese juice production.

Anheuser Busch focusing on non-alcoholic potential ​

US-based brewer Anheuser Busch now hopes to extend its presence in non-alcoholic drink production after agreeing earlier this year to join forces with mutational rival InBev in global beer production.

The company has announced it is forming a new subsidiary, known as 9th Street Beverages, which will allow it to focus on promoting its energy drink and functional water brands.

David English, vice president and general manager of the new subsidiary, said that 9th Street Beverages would look to step up the group’s sales and marketing within the non alcoholic segment.

English said that the division’s portfolio of brands like BORBA Skin Balance Water, Icelandic Glacial and Monster has posted a 77 per cent improvement in sales this year.

“With the success of our non-alcohol portfolio and opportunities to continue the momentum, we felt the time was right to bring further focus to this segment of our business,”​ he stated.

English said that the subsidiary will target retail outlets that already stock its alcohol products as well as new types of venues such as spa, gyms and health stores.