Coca-Cola
Latin American bottler Coca-Cola FEMSA has begun building a concentrate plant in the Costa Rican city of Liberia. The bottler serves half of Mexico, parts of Argentina, Brazil, Guatemala, and Colombia, and all of Costa Rica, Nicaragua, Panama, Venezuela and the Philippines. The $50 million bottling plant, expected to be completed by early 2020, will produce Coke concentrate and 89 other beverages exported to Central America, the Caribbean, Chile, Mexico, Brazil and Argentina.
While adapting its portfolio of beverages to reflect evolving consumer preferences, Coca-Cola is also looking for ways to boost sales of its namesake brands. The company, for example, is testing in select overseas markets a version of Coke that contains coffee. The beverage has more caffeine than a regular Coke, but less than a cup of coffee. CEO James Quincey said “early results are promising” in Australia, Vietnam, Cambodia, and Thailand, but the company has not disclosed where Coke Plus Coffee will be introduced next. Quincey said the company has been tinkering with Coke Plus Coffee, “dialing up” the coffee cues to deliver a stronger aroma when opened.
As water bottle refill fountains grow more popular on college campuses, and in office buildings, airports, and gyms, Coca-Cola has launched an experiment with a free water dispenser that – for a fee – will also mix in carbonation and flavors. For now, test models of the Dasani Purefill machine are located on the campus of Georgia Tech and near the company headquarters in Atlanta. But the company will expand the experiment in the fall to 20 machines on college campuses in 15 states. Thirsty students can refill a bottle with filtered water for free or use a payment card to add bubbles and flavor for $0.05 an ounce. According to the company, machine users pay for bubbles and flavor about 10 to 20 percent of the time.
Coca-Cola is expanding the marketing reach of the South African sparkling apple juice beverage Appletiser to Spain and eventually other countries in Western Europe and the Americas. The Appletiser brand, created in the 1960s, was acquired by the Coca-Cola Company in 2016 and was successfully rolled out across Southern Africa. The company said in a statement that it had sent out over 20,000 presentation kits to the Spanish market as an introduction, and the beverage is stocked by more than 43,000 Spanish customers.
Coca-Cola CEO James Quincey announced that it is raising the price of its namesake soft drink and other carbonated beverages in response to the Trump administration’s imposition of tariffs on imports. The ten percent tariff imposed on aluminum increased production costs significantly, a development that is “disruptive for us ,,, disruptive for our customers,” Quincey said during an earnings call. The specifics of Coke’s U.S. price increases are not available because they vary by retailer. However, Sam Adams brewer Boston Beer said it would raise prices by two percent in the second half of the year due to the tariffs. The Beer Institute said the tariff could lead to 20,000 workers losing their jobs in the industry because 60 percent of beer made and sold in the U.S. comes in aluminum cans or bottles.
Coca-Cola CEO James Quincey announced that it is raising the price of its namesake soft drink and other carbonated beverages in response to the Trump administration’s imposition of tariffs on imports. The ten percent tariff imposed on aluminum increased production costs significantly, a development that is “disruptive for us ,,, disruptive for our customers,” Quincey said during an earnings call. The specifics of Coke’s U.S. price increases are not available because they vary by retailer. However, Sam Adams brewer Boston Beer said it would raise prices by two percent in the second half of the year due to the tariffs. The Beer Institute said the tariff could lead to 20,000 workers losing their jobs in the industry because 60 percent of beer made and sold in the U.S. comes in aluminum cans or bottles.
Danone
With demand for organic products in Spain growing by double digits, Danone has launched an organic fruit drink line there that contains no artificial ingredients, and was made using fruits grown without pesticides, herbicides or fertilizers. Danone’s Font Vella Organic brand is made with mineral water, fruit juice and a range of natural ingredients, and is available in orangeade with oregano and lemonade with basil from Spanish retailers in 40 cl bottles, with a suggested retail price of $1.69 a bottle.
Nestle
Nestlé S.A. CEO Ulf Mark Schneider, acknowledging that profit margins on its water products have been disappointing over the past six months, recently hinted that price increases might be needed beyond the U.S. to offset increased packaging and distribution costs. “The margin for the first six months does not look pretty,” Schneider said, thanks to PET price increases and increased distribution costs. Nestlé Waters increased prices in the U.S. in June, where rising freight and other costs have affected the company significantly. Organic growth in Nestlé Waters was one percent in the first half of the fiscal year, but net sales were down 0.5 percent. Overall, the company’s net profit increased 19 percent in the first half of the year, to $6 billion.
Nestlé Waters NA marketing head Antonio Sciuto, credited with transforming the company’s digital strategy, has resigned and will be replaced by Yumi Clevenger-Lee. The change in leadership comes in the midst of a mushrooming sparkling water marketing war among Nestlé, Coca-Cola, PepsiCo, and smaller marketers such as La Croix. Nestlé is the market leader, after private label brands, commanding a 13.3 percent share in the U.S. Private labels have 31.2 percent of the market. PepsiCo and Coca-Cola have 3.3 percent and 4.5 percent, respectively, but have been spending heavily on marketing and have been gaining. Nestlé's share fell by 1.3 points in the year-to-date period through mid-June. Clevenger-Lee had been marketing director for the Latin American division of Cereal Partners Worldwide, a joint venture between Nestlé and General Mills.
Other Companies
Energy beverage start-up MATI (Durham, N.C.) has hired two senior executives to shepherd an aggressive expansion plan. Former Coca-Cola executive Eric Masters will serve as CEO, and Mark Mullins, a co-founder of Social House Vodka, will be vice president of sales. Masters replaces Tatiana Birgisson, who founded the company while a student at Duke University. The company said it will soon be announcing new products, geographic expansion, and the closing of additional growth capital that will fund “explosive growth.” MATI is a blend of craft-brewed guayusa, fruit juices, and natural flavors.
Younger Japanese consumers are turning away from the tonic beverages known as “dorinku-zai,” according to analysts at Euromonitor, toward modern energy drinks. Brands such as Monster and Red Bull have performed very well over the last five years, thanks in large part to tie-ins with sports events. Another factor leading to the decline in dorinku-zai is a mismatch between product image and consumer needs. Younger people looking for greater work-life balance associate dorinku-zai with overworked, fatigued salary workers. The only dorinku-zai brands doing well are those that offer functional benefits, like beauty, because they contain fiber, vitamins, or collagen.
Trends in European beverage consumption toward less sugary, lower calorie juice drinks bodes well for juice concentrate producer Austria Juice, according to the company’s top sales officer. Austria Juice is one of the major producers of red fruit, especially berry, concentrate in Europe. Kai Oliver Antonius says consumers are choosing water-based beverages with a lower juice concentrate and more fizz, a trend that presents many opportunities for innovation. Other possibilities include plant-based and organic beverages, cold brew coffee extracts combined with various juices, herbal extracts, and tea and fruit combinations.
National Grape Cooperative subsidiary Welch’s – known more for grape juice, jams, and jellies – is testing the potential of energy beverages with a brand known as Sparkling Plus Energy, made with grape juice and organic coffee extract. The company, which says it saw a need for an energy beverage “that actually tastes good,” is targeting men In three markets (Baltimore/Washington, D.C., Philadelphia, and New York City), but is planning to expand to other regions. Welch’s Energy is available in Sparkling Grape and Sparkling Fruit Punch flavors with a suggested retail price of $2.19 for a 16 oz. can.
Dallas, Texas-based health and wellness company Rocky Mountain High Brands announced it has acquired BFIT Brands, a Phoenix, Ariz.-based maker of whey protein and energy drink FitWhey. The 100-calories water-based drink combines whey isolate protein, caffeine, vitamin B, and other ingredients. FitWhey is naturally sweetened, flavored, and colored and comes in four flavors: berry, lemonade, orange cream and grape. The beverage is sold in nutrition stores, convenience stores, and fitness clubs in the Southwest.
