In order to become a comprehensive beverage company, Coca-Cola has a lot of action!

In order to become a comprehensive beverage company, Coca-Cola has a lot of action!
Since Coca-Cola has formed an alliance with Fonterra, its first products have just been launched in Vietnam under the Nutriboost brand.

Last week, beverage giant Coca-Cola and New Zealand dairy giant Fonterra formed a strategic alliance in Southeast Asia. According to New Zealand media reports, this alliance is due to Fonterra's transition to a joint venture, and Coca-Cola hopes to diversify its investment from its consistently high sugar content. In addition, this cooperation does not involve Fonterra's capital injection.

The collaboration combines Fonterra's dairy nutrition knowledge with Coca-Cola's sales and distribution capabilities, and the product is launched under the Coca-Cola brand “Nutriboost”.

Steve Bonz, general manager of the Coca-Cola-Hengnet Strategic Alliance, said the new Nutriboost products are developed for different functional needs, such as beauty, growth and energy.

The existing Nutriboost series has been sold in the Vietnamese market for about 10 years as a milk-juice blend, launched for the specific vitality needs of young people and young people but with low dairy content. The new products expanded this time contain more than 90% of milk.

Clare Morgan, Marketing Director of Strategic Alliance, said that the new Nutriboost UHT milk series in Vietnam mainly includes three types, namely Nutriboost Children's Series, Breakfast Series and Beauty Series.

Children's series Target children over the age of three, each product added different vitamins and minerals according to different consumption occasions, divided into: morning growth (adding vitamins to promote growth), play time (enhanced immunity) and good night ( Add DHA to promote brain development).

The breakfast collection is rich in oatmeal, energy and fiber, while the beauty line is non-fat for female audiences and enhances health-related minerals such as collagen and zinc.

The Nutriboost Children's Collection is now available, and the next two will be available from the end of May to the beginning of June.

Coca-Cola-Hengnet Strategic Alliance

According to Bonz, the alliance was established to develop, produce, distribute and sell value-added dairy products in the ASEAN region.

“We have three main reasons for doing business in Vietnam. The first is opportunity because Vietnam is the third largest dairy market in the ASEAN region.”

“In addition, we have an existing brand in China, Nutriboost, and we have traction, we can launch new products based on this brand, instead of spending too much money to build new brands from scratch.”

“We also have to operate through a system that includes bottling business partners, (and) the bottler and the general manager of the Coca-Cola Vietnam branch (very enthusiastic about this opportunity).”

As a start-up between two big companies, the alliance team (including Bonz and Morgan) consists of five core members: two from Coca-Cola and three from Fonterra.

Morgan said the alliance was based on the expertise of the two companies. "Coca-Cola has good distribution channels, strong brands, excellent marketing, etc., and Fonterra has more than 100 years of dairy expertise (and experience). And ensure that the product is processed according to (strict standards)."

According to consumer demand, the current focus of the alliance is on the ready-to-drink product market. According to Bonz, “These requirements are usually functional, but they may also be in order to meet the taste needs of the region.”

The alliance is currently conducting research in more markets in Southeast Asia and screening different concepts to prepare for further product development. The alliance may consider launching a new series that focuses on the sensory level with Fonterra's existing brand Anchor.

“The other large dairy markets in ASEAN are actually Thailand and Indonesia, so we are definitely investigating these markets right now.”

Analyst's comment

After the two giants announced the strategic alliance, GlobalData consumer research analyst Shagun Sachdeva said that this is a "key growth opportunity" for Coca-Cola and Fonterra.

Sachdeva said: "The reason behind (Coca-Cola alliance) is that it has evolved into a comprehensive beverage company strategy that diversifies from high-sugar beverages to other beverages based on changing consumer demand."

In order to become a comprehensive beverage company, Coca-Cola has been moving frequently last year. Specific to the dairy market, Coca-Cola announced in June last year that it invested 85 million Canadian dollars (ie US$66 million) in the new ultra-filter milk brand Fairlife in Ontario, Canada, so Canada will become Fairlife's first international market. In addition, in April this year, Fairlife has invested more than $200 million to establish a new production and distribution facility in Arizona.

The most significant acquisition was the August 31, 2018, when Coca-Cola announced that it would acquire Costa Coffee for a total of 3.9 billion pounds ($5.1 billion), announcing the third acquisition of the month. Earlier in early August, the beverage giant invested in the second largest shareholder of the high-end sports drink BodyArmor, and then bought the oldest carbonated beverage brand Moxie in the US market.

In September, Coca-Cola acquired Australia's Organic & Raw Trading Company and immediately owned the first CommScope tea brand Mojo. In Australia, the company also acquired a 45% minority stake in Made Group, which is known for its cold-pressed juices and high-protein smoothies. Coca-Cola also acquired Tropical Fruits (Tropico) in France, giving the company a “strong foothold” in the static fruit-flavored beverage market.

“(At the same time,) Fonterra is looking for joint ventures that don’t need to inject capital, and the alliance has been able to use the Coca-Cola brand to add its own line of products.”

“This strategic alliance provides a key growth opportunity for both companies to capture the rapidly growing dairy market in Southeast Asia and enable both parties to leverage the growing and diverse demand for nutrient-rich products from consumers in the region. ""