Coca-Cola's second-quarter earnings report was released, and its performance in the Chinese market was so poor that it was singled out. Second-quarter revenue fell by 5.1%, and total revenue for the first half of the year also declined by 5% year-over-year. The unsatisfactory sales in the Chinese market dragged down Coca-Cola's overall performance in the Asian market. Therefore, Coca-Cola needs to change its strategy and consider how to shift its focus. Venturing into the health market might be a good option. Indeed, Coca-Cola has been active recently in non-soda areas, especially in healthy beverages. It acquired AdeS, a brand focused on soy-based drinks and juices; invested in Aloe Gloe, a California-based aloe vera water brand. In China, it bought the plant-based protein drink brand Zhonglv Culiangwang and introduced Zico coconut water. Its energy drink brand Monster, in which it holds a stake, also recently entered the Chinese market. Coca-Cola also recently announced plans to launch ready-to-drink cold brew coffee and tea lattes under its tea brand Gold Peak, with a target release in the first quarter of 2017. Coca-Cola did not disclose many details, only mentioning that both the cold brew coffee and tea lattes will use "real milk and sugar." This is likely why Coca-Cola placed these two new drinks under the Gold Peak brand—one of the selling points of the Gold Peak series is that it uses "Real Sugar" rather than highly processed corn syrup. The move into ready-to-drink coffee is mainly due to the rapid growth of ready-to-drink coffee, especially cold brew. Cold brew coffee saw a sales growth rate of 115% in 2014. According to market research firm Mintel, the category's sales are around $2 billion. Although we are accustomed to bottled ready-to-drink tea, in the United States, bottled tea beverages are an emerging market. There are very few ready-to-drink tea latte drinks in North America; most sales are of freshly made black or green tea lattes at Starbucks or similar coffee shops. Bubble tea is becoming increasingly popular in the U.S., with more and more tea shops opening. Search trends indicate that tea lattes are indeed gaining popularity. Search trend for "Tea Latte" on Google Trends from 2004 to present. Whether it's investing in aloe vera water, acquiring a soy drink brand, or announcing the launch of cold brew and tea latte drinks, Coca-Cola is essentially shifting its focus to healthier beverages. In the second quarter of 2016, Coca-Cola's soda sales in the North American market fell by 1%, but non-soda beverages increased by 3% in sales. Non-soda beverages now account for 30% of Coca-Cola's total sales, compared to just 10% in 2000.
Gongguan Perspective As people around the world increasingly embrace the concept of healthy eating, the pursuit of health is no longer limited to specific groups; it is gradually changing global dietary consumption habits. In North America, twenty years ago, people would drink a Coke in the morning. Now, at 8 a.m. or 2 p.m., Starbucks is always crowded. The low sales of Coca-Cola in the Asian market shows that dietary consumption habits in Asia have also changed. Consumer demand should always cater to the consumer market to increase sales. Even major brands like Coca-Cola, which started with carbonated drinks, must adjust accordingly to the consumer market. To build a reputation in people's hearts, brands must start from consumer needs and cater to consumer tastes. When the market demands it and you happen to be professional, that is the best guarantee for consolidating brand loyalty. Source: FMCG Gongguan -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and actionable tutorials for companies and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]