Coca-Cola to spur per capita sales in China
Updated: 2011-09-06 10:25
By Michael Wei (China Daily)
SHANGHAI - Coca-Cola Co, the world's largest maker of soft drinks, is investing in bottling plants and delivery trucks in China as it targets an increase in average per-capita consumption from the current two drinks a month.
A Coca-Cola Co bottling plant in Hohhot, North China's Inner Mongolia autonomous region. Coca-Cola said it saw huge opportunities amid rising per capita consumption of soft drinks in China. [Photo/Agencies]
The maker of Sprite, China's best-selling soft drink, has a "huge opportunity from a per capita point of view" in China, Martin Jansen, regional director of the company's bottling business in China, Singapore and Malaysia, said in an interview on Saturday.
Coca-Cola plans to invest $4 billion with its Chinese bottling partners Swire Beverages Ltd and COFCO Coca-Cola Beverage Co in China over three years from 2012 to widen its lead over rival Pepsi Co Inc. Most of that will be spent to build more bottling plants, buy trucks, expand distribution infrastructure and add coolers, said Jansen, who is responsible for 15 bottling facilities in China.
Sales will probably increase at a "high double-digit" rate in China this year and next, Jansen said. "If you compare the number of beverages we sell in China, it's roughly just over two per month. If you take a country like Mexico, they also drink two, but per day."
Jansen, a Dutch native, said the company will probably build factories in southwestern China's Sichuan province as well as expand capacity by adding more manufacturing lines. Plans to add bottling plants over the next three years are still being completed, he said.
Coca-Cola has more than 40 factories in China and employs more than 48,000 people, according to an Aug 18 statement by the company.
Coca-Cola's sales in China surpassed 1 billion unit cases in the six months through June, double the rate of 2005, when it sold that amount for the whole year, the statement said. A unit case has 24 servings, with each weighing 8 ounces (227 grams).
Coca-Cola, which said in June that it was in talks with the Chinese government to sell shares in Shanghai, is the dominant soda maker in China with 61.5 percent of the market last year, followed by Pepsi with 29 percent, according to London-based research company Euromonitor International.
For soft drinks, a category that includes fruit and vegetable juice, ready-to-drink tea and bottled water, Coca-Cola is also the industrial leader in China with a 16.8 percent market share, according to Euromonitor's data.
China's soft drinks market has maintained annual double-digit growth on average for more than 10 years. Sales almost doubled to 270 billion yuan ($41.5 billion) in 2010, according to Euromonitor.
China is Coca-Cola's third-largest market after the United States and Mexico.