Coca-Cola, PepsiCo and More Tap Asia/Pacific Market for Growth
June 29, 2009 -- While economies suffer in the United States, Europe and elsewhere, consumer goods companies, like Campbell Soup, Coca-Cola and PepsiCo, are looking to the developing markets of Asia/Pacific and China for growth.
For example, The Coca-Cola Company and its bottling partner, COFCO Coca-Cola Beverages Ltd., opened two new bottling facilities last week in less developed central and western China. The new facilities are testimonies to Coca-Cola's long-term commitment to China as part of a recently announced $2 billion, three-year investment plan aimed at bolstering further growth in one of the world's largest and fastest growing beverage markets.
"Our business in China grew 19 percent in 2008 and China is now our third largest market. By opening new plants in Jiangxi and Xinjiang, we will be able to increase our geographic presence, enhance our competitive edge in China and support local community development by sponsoring jobs, local procurements and education," said Muhtar Kent, chairman and chief executive officer, The Coca-Cola Company.
Meanwhile, Coca-Cola's biggest competitor, PepsiCo, announced expansion plans last week by way of a strategic alliance with Calbee Foods Company in Japan. The companies will jointly produce and sell a wide range of food products in Japan, such as potato chips, vegetable snacks, breakfast cereal and prawn crackers. Together, the businesses currently generate annual revenues of approximately $1.4 billion total. Additionally, PepsiCo recently opened its first overseas "green" plant in China, which reiterates the company's plans to invest $1 billion in the country.
"Despite the current uncertainty in many parts of the world, we have no doubt that China will remain a powerful engine of global economic expansion," said Indra Nooyi, PepsiCo chairman and chief executive officer. "This is the largest, most ambitious development effort we've undertaken in our more than 25 years of doing business here."
Reporting solid performance in Asia Pacific for the third quarter, The Campbell Soup Company continues to build its capabilities in emerging markets, like Russia and China. In December 2008, the company bolstered its Chinese broth business with a launch of its "Swanson" products in Shanghai, a decision based partly on research indicating that 72 percent of the population eats a bowl of soup every day.
According to Larry McWilliams, president, Campbell International, "Initial consumer response to our 'Swanson' broth range has been very positive. We have created a loyal consumer base in our lead market due to our unique offering. As we expand our geographic distribution, we plan to apply what we've learned from our initial efforts during the past twelve months and work hard to encourage consumer trial and build product availability."
In the coming months, look for more consumer goods companies to expand operations in the developing markets to offset losses on the homestead.
For example, The Coca-Cola Company and its bottling partner, COFCO Coca-Cola Beverages Ltd., opened two new bottling facilities last week in less developed central and western China. The new facilities are testimonies to Coca-Cola's long-term commitment to China as part of a recently announced $2 billion, three-year investment plan aimed at bolstering further growth in one of the world's largest and fastest growing beverage markets.
"Our business in China grew 19 percent in 2008 and China is now our third largest market. By opening new plants in Jiangxi and Xinjiang, we will be able to increase our geographic presence, enhance our competitive edge in China and support local community development by sponsoring jobs, local procurements and education," said Muhtar Kent, chairman and chief executive officer, The Coca-Cola Company.
Meanwhile, Coca-Cola's biggest competitor, PepsiCo, announced expansion plans last week by way of a strategic alliance with Calbee Foods Company in Japan. The companies will jointly produce and sell a wide range of food products in Japan, such as potato chips, vegetable snacks, breakfast cereal and prawn crackers. Together, the businesses currently generate annual revenues of approximately $1.4 billion total. Additionally, PepsiCo recently opened its first overseas "green" plant in China, which reiterates the company's plans to invest $1 billion in the country.
"Despite the current uncertainty in many parts of the world, we have no doubt that China will remain a powerful engine of global economic expansion," said Indra Nooyi, PepsiCo chairman and chief executive officer. "This is the largest, most ambitious development effort we've undertaken in our more than 25 years of doing business here."
Reporting solid performance in Asia Pacific for the third quarter, The Campbell Soup Company continues to build its capabilities in emerging markets, like Russia and China. In December 2008, the company bolstered its Chinese broth business with a launch of its "Swanson" products in Shanghai, a decision based partly on research indicating that 72 percent of the population eats a bowl of soup every day.
According to Larry McWilliams, president, Campbell International, "Initial consumer response to our 'Swanson' broth range has been very positive. We have created a loyal consumer base in our lead market due to our unique offering. As we expand our geographic distribution, we plan to apply what we've learned from our initial efforts during the past twelve months and work hard to encourage consumer trial and build product availability."
In the coming months, look for more consumer goods companies to expand operations in the developing markets to offset losses on the homestead.