June 2, 2011

China-launched Coke Brand Worth a Billion as Coke Considers IPO

Minute Maid Pulpy, first such brand to issue from emerging market, draws company consideration

Even as Coca-Cola announced Tuesday that it had made its first billion-dollar brand from an emerging market, it was considering an IPO in that market.

Reuters reported that Coke made the announcement about Minute Maid Pulpy, a brand devised in China and brought to billion-dollar status there, and said the company was also considering listing itself in Shanghai. Minute Maid Pulpy has become the 14th of Coke's brands to achieve the billion-dollar mark, but, according to Andres Kiger, senior director of integrated marketing communications for Coca-Cola in China, it is the first to do so from an emerging market development and launch.

In a statement, Kiger said, "What makes this one important for us is that this was started here, in an emerging market, China, and that's a testament to China." The brand, released in 2005, is now sold in 18 markets, including Mexico, Malaysia, Vietnam and Algeria.

Meanwhile, China's soft drink industry is growing at a compounded annual rate of 12.8%; juice drinks are growing at 16.2%, and the juice market is expected to more than double by 2015 to $23.9 billion, according to Euromonitor International. Marie Jiang, a retail analyst with Pacific Epoch, said in the report, "China is going to be used as a test base for new food and beverage products, because of its huge and diverse population. If it can succeed in China, chances are it will overseas."

Coke may be barely putting its toe in the water regarding the Shanghai stock exchange, but it has already committed to investing $2 billion in China. In October it opened three new plants in Inner Mongolia. And a place on the international board of the Shanghai Stock Exchange may not be too far off.

Geoff Walsh, public affairs and communications director for Asia Pacific of Coca-Cola, said in the report, "We are interested in exploring the opportunity of listing our stock on the Shanghai Stock Exchange. Obviously, we need to better understand the regulatory framework and listing requirements. We continue to have positive discussions with Chinese government officials as we look at this opportunity."

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