---
title: "Fanta's 'Double Standards' and Coca-Cola's Weakness"
description: "Fanta orange has been accused of using different ingredients in the UK and China, sparking a 'double standards' controversy. As Coca-Cola's carbonated drinks already face declining sales, this adds to the company's challenges."
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published: "2022-04-16"
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# Fanta's 'Double Standards' and Coca-Cola's Weakness

> Fanta orange has been accused of using different ingredients in the UK and China, sparking a 'double standards' controversy. As Coca-Cola's carbonated drinks already face declining sales, this adds to the company's challenges.

Source: Finance World Weekly (ID: cjtxzk)
Fanta orange has been exposed for using different ingredients in the UK compared to China, playing a 'double standards' game. Coca-Cola's carbonated drinks were already on the decline, and now the 'happy water for couch potatoes' is even less joyful.
Fanta has 'overturned'.
Recently, according to media reports, a Chinese student in the UK discovered that the ingredient list of UK Fanta orange differs from the product sold in China. The UK version contains concentrated fruit juice and uses additives that are considered healthier than the Chinese version.
Therefore, he believes that Coca-Cola, the company behind Fanta, is suspected of 'double standards'.
The topic trended on Weibo on April 11, with over 100 million reads and more than 3,700 discussions by that evening. Many users expressed disappointment with the brand. In today's declining carbonated drink market, this is not good news for Fanta's parent company, Coca-Cola.
As a classic carbonated drink under Coca-Cola, Fanta was introduced in Italy in 1955 and entered the Chinese market for production and sales in 1984. By 1994, its single-brand sales exceeded $1 billion. Fanta offers flavors including orange, apple, grape, lime, and mango, with Fanta orange being the most well-known among consumers.
It is worth noting that Fanta is not the first multinational food and beverage brand to be exposed for 'double standards'; Häagen-Dazs, Magnum, and Orion have all fallen into this 'pit'. What gives them the confidence to do this?
******Fanta's 'Double Standards' Overturn**
In the aforementioned British student's revelation, a comparison of the ingredient lists on the packaging of UK and Chinese Fanta orange was shown.
In the UK version, the preservative used is potassium sorbate, while the Chinese version uses sodium benzoate; the UK version contains sugar, while the Chinese version uses high-fructose corn syrup; the UK version uses natural colors extracted from pumpkin and carrots, while the Chinese version uses artificial colors such as tartrazine and sunset yellow.
(Comparison of Fanta ingredient lists in China and abroad, image/Weibo screenshot)
In response, a staff member at Shaanxi COFCO Coca-Cola stated that all ingredients in Fanta orange comply with national standards and that there is no 'double standards' discrimination against any region.
For example, regarding the difference in preservatives, the staff member explained that while there is a common perception that potassium sorbate is less toxic and safer than sodium benzoate, both are traditional preservatives with essentially equivalent preservative effects, and neither is superior. In China, sodium benzoate is more widely used than potassium sorbate.
However, on social media, many consumers continue to discuss the health impacts of the different ingredients.
On Weibo, some users pointed out that high-fructose corn syrup contains fructose and glucose and is high in calories. Others questioned whether consuming high-fructose corn syrup could lead to gout and fatty liver disease.
It is understood that as early as 2016, a report titled 'Research on Health Risks and Countermeasures of High-Fructose Corn Syrup' published by the School of Pharmacy at Fujian University of Traditional Chinese Medicine proposed that compared to glucose, fructose is more readily taken up by the liver, and excessive intake of high-fructose corn syrup can cause obesity, diabetes, hypertension, and other diseases.
Weibo influencer 'Dr. Lilac' once published an article stating that high-fructose corn syrup can be directly metabolized in the liver after ingestion, and the excessive lactic acid produced can inhibit uric acid excretion, ultimately leading to hyperuricemia.
Regarding artificial colors like sunset yellow, some consumers have complained, 'After drinking Fanta, my tongue turns orange,' and said they would not dare to drink it much in the future.
Fanta is a well-known brand under Coca-Cola. Coca-Cola has long been one of the world's leading beverage empires.
According to public data, when Coca-Cola was first invented in 1886, it sold only 9 bottles a day; now, 1.7 billion consumer servings of Coca-Cola products are enjoyed daily worldwide, with approximately 19,400 bottles sold every second.
With a sales network that penetrates all levels of offline channels like capillaries, and a diverse brand matrix, it has flourished in many regional markets globally. By the end of 2020, Coca-Cola had 43 factories in China, employing about 45,000 people.
Relying on strong brand power, for a long time, a bottle of Coca-Cola priced around 3 yuan has been one of the preferred drinks for young people in China.
But now, under the influence of Fanta, the 'happy water for couch potatoes' is making many people unhappy.
******What Gives Overseas Brands the Confidence for 'Double Standards'?**
What makes domestic consumers dissatisfied is that foreign consumer brands playing 'double standards' with domestic and international product standards are not limited to these cases.
Almost at the same time as the Fanta orange incident, the Korean product 'Samyang Fire Noodles' also overturned. Media reported that on the official website of Samyang Foods, the product sold in China has a shelf life of one year, while the product sold in Korea has a shelf life of 6 months.
Subsequently, a staff member at Samyang Foods (Shanghai) Co., Ltd. stated that the shelf life of Samyang Fire Noodles sold in China is 12 months, and they were unaware of the content on the Korean website. On April 10, the Ningbo Market Supervision Administration responded that it would investigate the matter.
In August last year, Unilever's well-known ice cream product Magnum made headlines for 'different ingredients in China and abroad'. Later, Häagen-Dazs was fined for using cocoa butter substitute in mooncakes and passing it off as chocolate. In September, the well-known brand Canada Goose was fined 450,000 yuan for false advertising, which also sparked heated discussion.
On March 1 this year, the Korean brand 'Orion' became the focus of public opinion overnight.
A netizen revealed that Orion had raised prices only for some markets, including China, and questioned whether the Orion Choco Pie sold in China uses cocoa butter substitute, while the ingredient list on Korean imported products shows cocoa powder.
It is known that cocoa butter substitute contains trans fatty acids, which, unlike natural cocoa butter, can be harmful to consumer health.
In response, Orion's official Weibo account stated that due to rising raw material prices, Orion China adjusted prices for some pie products in September last year, and no further adjustments have been made since. Different country markets are affected differently by raw material and labor cost increases, so price adjustment cycles also vary.
Additionally, regarding the 'double standards' controversy over ingredients, Orion claimed it was due to inaccurate translations of overseas product ingredient lists by translation software, and differences in requirements and naming conventions for ingredient lists across countries, which led to misunderstandings among netizens.
However, Orion's first official response was released as a screenshot of a mobile memo without the company seal, so after it was issued, doubts were not dispelled; instead, many netizens expressed dissatisfaction with the attitude and content of the response, accusing the company of being 'too perfunctory'.
Orion's official Weibo statement also emphasized that cocoa butter substitute and trans fatty acids are two different concepts. All Orion products have been tested for trans fatty acid content in accordance with national food safety standards, and all meet the national standard for trans fat content of 0 grams per serving.
Zhu Danpeng, an analyst at China Food Industry, told Finance World Weekly that Orion's response is debatable. If a food product contains cocoa butter substitute, it must be clearly labeled; if it is concealed, it is defrauding consumers. In his view, it is common for products to adopt different standards in different countries, but Orion's handling is clearly problematic. 'It has significant issues in its overall understanding and positioning of the Chinese market.'
Ding Liguo, a retail and marketing expert, told Finance World Weekly that because food safety requirements vary around the world, many multinational companies have developed different standards for global markets.
Some analysts suggest that cost may be one of the key factors for these brands adopting 'double standards' in different markets. When the Magnum incident was exposed, Song Liang, head of the Economic Expert Group of the China Agricultural Reclamation Dairy Industry Alliance, estimated that the price difference between milk reconstituted from powder and concentrated milk could reach 3,000-4,000 yuan per ton.
The strong market foundation and brand power of well-known overseas consumer brands in China also give them the confidence for 'double standards'.
Fanta has long been a single product with sales exceeding $1 billion under Coca-Cola. Magnum has been dubbed the 'noble ice cream' since entering the domestic market in 1996, with annual sales in the domestic market reaching nearly 1 billion yuan in 2020.
Orion entered China in 1995, and by 2010, China had surpassed Korea to become its largest global sales market, accounting for more than half of its annual revenue. In 2020, Orion China's revenue reached 7.2 billion yuan.
Samyang Foods' Fire Noodles are also one of the 'internet-famous' foods in China. On its Tmall flagship store, the best-selling super-spicy chicken flavor Fire Noodles 5-pack has monthly sales exceeding 10,000 packs.
However, domestic consumers are increasingly not blindly 'worshipping' these overseas brands and are no longer willing to accept 'double standard' ingredient lists.
On Weibo, a blogger named 'Old Photo Studio' said that multinational companies like Coca-Cola are 'exploiting loopholes in the system'. To survive in fierce market competition, they choose not to use high-quality raw materials but to 'rack their brains to cut corners, save costs, evade regulation, and pursue profits by any means, leading to bad money driving out good'.
How long can the giants' confidence last?
******Coca-Cola's Growth Challenges**
Coca-Cola, the protagonist of this Fanta 'double standards' incident, is also not having as easy a time as before.
On April 10, 2021, Coca-Cola's chairman and CEO suddenly claimed that due to rising raw material prices, the company planned to raise product prices. In some convenience stores in Beijing, the price of classic bottled Coca-Cola is currently 3.8 yuan. The last time the company announced a price increase was in 2018.
(On April 11, classic bottled Coca-Cola at a Beijing convenience store, priced at 3.8 yuan, image/Finance World Weekly)
For a long time, Coca-Cola has maintained a retail price of 3 yuan. Xiao Zhuqing, a Chinese consumer goods marketing expert, once told Finance World Weekly that Coca-Cola typically shifts the pressure of price increases to the upstream supply chain. It creates economies of scale through small profits and high sales volume, thereby excluding other competitors from entering the carbonated drink sector.
This also means that Coca-Cola must have carefully considered the risk of losing its competitive advantage before raising prices.
In fact, in recent years, Coca-Cola has been facing declining performance. In 2016, the company's revenue was $41.863 billion. But in 2017, revenue fell 13% year-on-year, and net profit dropped by more than 80%.
After that, the company's performance recovered to positive growth in 2019, but then the pandemic hit. In 2020, revenue was only $33.014 billion, down 11% year-on-year, and net profit fell 13%.
(Changes in Coca-Cola's operating revenue from 2000 to 2023, source: Bloomberg. Image/Industrial Securities Economic and Financial Research Institute)
In addition, Coca-Cola even saw reports of layoffs. In December 2020, media reported that Coca-Cola would cut 2,200 jobs, with severance costs possibly exceeding 3.5 billion yuan, and the number of operating departments in four U.S. regions would also be reduced from 17 to 9.
At the same time, Coca-Cola will also undergo a restructuring plan, separating the Coca-Cola brand from the flavored soda business, combining coffee and tea products with sports drinks, and expanding into plant-based beverages in the future.
Of Coca-Cola's product revenue, 71% comes from carbonated drinks, while mineral water, juice drinks, and other categories account for only 17%, 7%, and 5%, respectively. The carbonated drink 'sugar water' business is quite profitable, with gross margins stable at around 60%.
But as consumers increasingly value health, carbonated drinks are no longer 'favored'.
On June 14 last year, footballer Cristiano Ronaldo, at a press conference for Portugal's match against Hungary, moved aside two bottles of Coca-Cola as soon as he sat down and said, 'Drink water, not Coke.' As soon as he said this, Coca-Cola's stock price quickly fell from $56.10 to $55.20, a drop of 1.6%, and its market value evaporated by $4 billion within half an hour.
The carbonated drink market is shrinking. According to data from the Prospective Industry Research Institute, in the U.S., the carbonated drink market has been declining for many years since 2005, with a compound annual growth rate of -0.8% for the global carbonated drink market from 2014 to 2019.
The Chinese market is similar. Data from the Prospective Industry Research Institute shows that the domestic carbonated drink market was about 78.2 billion yuan in 2013, experienced growth and then decline, falling to 76.1 billion yuan in 2018, and rising to about 86.4 billion yuan by 2019, with a compound annual growth rate of -1.65% from 2013 to 2019.
According to a report by Orient Securities Research Institute, as the pace of work and life accelerates, domestic beverage consumption scenarios have expanded from 'fatigue' scenarios like overtime, staying up late, and post-exercise to leisure and entertainment scenarios such as parties, e-sports, and music festivals, driving other functional beverages to maintain high growth rates, with a compound annual growth rate of 10.7% from 2016 to 2020.
At the same time, with the rise of young people's love for '0 sugar, 0 fat, 0 calorie' products, the popularity of sugar-free drinks has also risen.
In Convenience Bee's '2020 Annual Popular 100 Products List', Genki Forest sparkling water and Pepsi sugar-free cola ranked at the top of beverage products. New brands like Genki Forest are beginning to compete for market share from 'predecessor' Coca-Cola in China.
Coca-Cola has had to explore business beyond traditional carbonated drinks.
With its strong financial strength, the company has made multiple acquisitions across sports drinks, soy milk drinks, and dairy drinks, including Monster, Honest Tea, Topo Chico sparkling water, ZICO coconut water, Fairlife milk, Costa, MOJO kombucha, and many other brands.
In China, Coca-Cola's various 'novel' products are also being quickly arranged for shelves.
On the market, one can see 'Zero Coke' claiming to have no calories, 'heatable' ginger Coca-Cola, and sugar-free lemon mint Sprite; in other categories beyond carbonated drinks, Coca-Cola has launched low-alcohol flavored wine brand 'Lemon-Do', hard seltzer Topo Chico, sparkling water 'AH!HA!', and Minute Maid apple cider vinegar juice drink.
According to Coca-Cola China's official website, its products now span multiple brands across different beverage categories, covering still and sparkling water, dairy, juice, organic and plant-based drinks, tea, and coffee.
(Coca-Cola beverage products, image/Coca-Cola official website)
To capture the Gen Z market, Coca-Cola has put significant effort into marketing.
It has played with bottle label copy, first launching 'name bottles' in Australia in 2011, followed by 'lyric bottles' and 'dialogue bottles' to emphasize social attributes and create 'internet hits'. In the selection of domestic product endorsers, it has increasingly favored new-generation idols, such as Wang Junkai.
But because Coca-Cola's carbonated drink business is so large, even after laying out a full-category beverage portfolio, consumers still seem to have the original 'stereotype' of Coca-Cola, and in the minds of many users, it cannot achieve 'de-carbonation'.
Ding Liguo told Finance World Weekly that once a brand has a flagship product, new products developed to fill emerging markets need a long cultivation period.
'Because the main brand's total sales are high, even if its sub-brands achieve considerable sales, they won't attract much attention. I estimate many people only remember Coca-Cola, Sprite, and Fanta, and are unaware that the company has so many product lines.'
Interestingly, in 2005, Coca-Cola launched 'sugar-free, calorie-free' Coke Zero, which had a seemingly healthier ingredient list but a taste vastly different from the original traditional Coke, and was once rated by netizens as one of the 'top ten worst-tasting drinks in the world'.
What troubles Coca-Cola even more is that its major competitor, PepsiCo, is also pursuing diversified category expansion, stepping outside the beverage industry to directly enter the food and snack sector, and doing quite well. By 2019, PepsiCo's food business revenue accounted for as much as 54%, surpassing its beverage business.
In its financial reports, PepsiCo divides its business into seven segments: Frito-Lay North America, Quaker Foods North America, PepsiCo Beverages North America, Latin America, Europe, Africa/Middle East/South Asia, and Asia Pacific/Australia/New Zealand/China.
Among them, Frito-Lay is PepsiCo's food company, mainly producing snacks like potato chips and corn chips. Well-known brands like Cheetos and Lay's belong to Frito-Lay. Quaker Foods is a globally renowned cereal brand, acquired by PepsiCo in 2001.
The latest financial report shows that PepsiCo's net revenue in 2021 was $79.474 billion, a year-on-year increase of 12.9%; annual net profit was $7.679 billion, up 7.02% year-on-year.
Among them, Frito-Lay's annual net revenue was $19.608 billion, second only to North American beverage business, with growth of 8%; Quaker Foods' annual net revenue was $2.751 billion. Additionally, the Asia Pacific/Australia/New Zealand/China segment had annual net revenue of $4.615 billion.
In comparison, Coca-Cola's net revenue for the same period was $38.7 billion, up 17% year-on-year; net profit was $9.771 billion. In terms of revenue, it is fully half of PepsiCo's. However, in terms of gross margin, PepsiCo's 53.4% is still lower than Coca-Cola's 60%, so selling 'sugar water' is still more profitable than snacks.
But before this, PepsiCo had also experienced several years of single-digit revenue growth, with net profit declining 3% year-on-year in 2020 and 42% the year before. Both carbonated drink giants need to continue finding ways to improve themselves.
******Users Will 'Vote with Their Feet'**
Multinational consumer giants have accumulated a huge user base and brand influence in the domestic market. But now, they are all facing the fading of their halo.
Häagen-Dazs, which 'overturned' last year, saw its ultra-premium ice cream sales revenue drop from $803 million in 2018 to $718 million in 2020.
Orion China's revenue was 7.718 billion yuan in 2016, but fell to 5.658 billion yuan by 2019. Although its overall performance in 2020 returned to the 7 billion yuan mark, it still did not recover to the 2016 level. In 2021, Orion's revenue in China declined again to 6.25 billion yuan.
After the 'double standards' incident was exposed, not only did many consumers express dissatisfaction on social media, but videos of some retail store owners removing Orion products from shelves also circulated on the internet.
(Image/Visual China)
With the general trend of consumption upgrading and the rise of local consumer brands, domestic consumers are no longer blindly pursuing overseas brands but are increasingly valuing cost-effectiveness and personalized consumption.
But for these well-known brands, if they rely on the Chinese market while adopting 'double standards', in the long run, even the strongest brand power will inevitably be weakened, and users will naturally 'vote with their feet'.
'What multinational companies need to do is capture the stomachs of Chinese consumers, not play tricks with formulas,' Ding Liguo said.
**Are you 'watching' me?**


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