The Coca-Cola CompanyGroup 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

Huiyuan’s Most Popular Brands

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

Team 5: Coca-Cola

Market Sales Potential

“By adding Huiyuan, Coke may force

weaker players out, and if the deal goes through, profits will

then follow!”

-BusinessWeek