Coca-Cola Milestone: First Billion Dollar Brand in China

China has been the fever dream of foreign marketers and businessmen since the 1800s; hundreds of millions of consumers who, since the reforms of the late 1970s, are increasingly eager to buy branded products. Realizing that dream has been far harder than anyone imagined, but the investment and commitment are beginning to pay off.

As the following article by Shirley Brady at brandchannel describes it, figuring out this market in a scalable way may lead to similar breakthroughts in other developing countries as growth in home markets plateaus:

"Minute Maid Pulpy, Coca-Cola's juice drink developed for China, has passed US$1B in sales to become its first "billion dollar brand" from an emerging market.

According to Reuters, it "joins Coke's lineup of 13 other brands that have achieved sales of at least $1 billion (622 million pounds), which include Coke Zero and Diet Coke."



Developed in China and launched in 2005, it is now sold in 18 markets including Malaysia, Mexico, Pakistan, Vietnam and Algeria. As Reuters notes,

China's soft drinks industry is growing at a compounded annual growth rate of 12.8 percent, according to 2010 data from Euromonitor International. Its juice drink segment is growing at 16.2 percent annually, one of the fastest growing segments overall.

China's juice market is expected to more than double to $23.9 billion by 2015 from current figures, according to data from Euromonitor International.

Coke sees huge potential for its beverages in China, where per capita consumption is only 32 bottles of Coke products a year, compared to 150 in Hong Kong and more than 500 in the United States.

Coke's sales in developed markets have been slowing for years. To reach its targeted 5-6 percent annual earnings growth, it will need to focus increasing efforts on emerging markets that generate annual economic growth in that range, including China, India and Africa.

The company is increasing investments in developing countries as part of its strategy to double by 2020 its $100 billion of total global revenue in 2009.

Coke has said it will commit $2 billion in investment into China and last October opened three new plants in Inner Mongolia.