Coke tightens grip on drinks market

<p>The deepening of the Coca-Cola and Nestle partnership will open up </p><p>the life science strengths of the Swiss food group to Coke in its drive </p><p>to become a total beverage company. </p><p><BR><BR> </p><p>Mr Scott Price, Coca-Cola China director and country manager for Hong </p><p>Kong and Macau, said the recent boost to the two companies' coffee and </p><p>tea joint-venture, would accelerate development of Coke's growing </p><p>portfolio in the lucrative non-carbonated soft drinks segment. </p><p><BR><BR> </p><p>Pending regulatory approval, the 50:50 joint-venture will replace the </p><p>present decade-old Coca-Cola & Nestle Refreshments (CCNR) partnership </p><p>with the renamed Beverage Partners Worldwide (BPW) operation. </p><p><BR><BR> </p><p>On top of CCNR's existing Nestea and Nescafe brands, Coca-Cola will add </p><p>its Tian Yu Di and Yang Guang tea businesses, while Nestle will bring </p><p>its Belte tea operations to the BPW venture. </p><p><BR><BR> </p><p>According to Mr Price, BPW will function as an entrepreneurial unit and </p><p>will be dedicated to tapping the growth potential of emerging beverage </p><p>segments. These include ready-to-drink coffee, teas and beverages with a </p><p>healthy positioning such as herbal teas. </p><p><BR><BR> </p><p>"BPW is certainly meant to assist in countries where they have not </p><p>achieved a high level of portfolio diversification since teas and coffee </p><p>is certainly one of the biggest non-CSD (carbonated soft drinks) </p><p>beverage that people consume," said Mr Price. </p><p><BR><BR> </p><p>The BPW deal is one of several initiatives that Coke is implementing to </p><p>increase shareholder value and close the door on what had been the most </p><p>difficult three years in its history. </p><p><BR><BR> </p><p>"In a market and industry where shareholders are always looking for </p><p>incremental value, by leveraging our distribution and marketing </p><p>expertise to beverages outside CSD, we believe it certainly represents </p><p>low-risk, high return strategic alignment," said Mr Price. </p><p><BR><BR> </p><p>With regulators now combing through the BPW deal, it is still unclear </p><p>how the new operation will pan out in Hong Kong, one of the larger CCNR </p><p>operations worldwide in profit and volume terms. </p><p><BR><BR> </p><p>Coke has a portfolio of about 14 brands in Hong Kong, with last year's </p><p>launch of Nagomi green tea and energy beverage Powerade. </p><p><BR><BR> </p><p>Two new brand launches and several product extensions are in the </p><p>pipeline this year, which will also see the company use Powerade for the </p><p>first time as the official beverage in place of Coca-Cola for next </p><p>month's Rugby Sevens in Hong Kong. </p><p><BR><BR> </p>