The likeness of billionaire Warren Buffett is gracing Cherry Coke cans in China, where the company's largest investor enjoys a legendary reputation.
Coca-Cola announced over the weekend that a grinning cartoon portrait of the American business magnate would adorn cans and bottles of his favourite flavour after it was introduced in the country on March 10.
Berkshire Hathaway, Buffett's investment firm, is Coca-Cola's biggest shareholder with a 9.3 percent stake valued at about $17 billion.
"Incidentally, there is no compensation involved," Buffett told Yahoo Finance of the use of his image for "a limited promotional period."
The 86-year-old investor and philanthropist has been photographed on numerous occasions taking a swig of Cherry Coke, earning him the title of "best-known fan" from Coca-Cola chief executive Muhtar Kent.
In Communist-ruled China, where Chairman Mao portraits are as ubiquitous as brand-name logos, Buffett's business acumen has made him a celebrity and inspired thousands of Chinese investors to reportedly flock to Omaha, Nebraska, for Berkshire Hathaway's annual meeting last year.
While the meeting was livestreamed around the world, simultaneous translation was only offered in Mandarin.
Buffett has in turn lauded China's "totally miraculous" growth.
As for his enduring appreciation of Cherry Coke -- he invested in Coca-Cola as early as 1985 -- Buffett admitted in his shareholders' letter last February that he consumes enough Coke and candy "to satisfy the weekly caloric needs of an NFL lineman."
"There's nothing like eating carrots and broccoli when you're really hungry and want to stay that way", he added.
The Coca-Cola Company will soon launch Coca-Cola Energy in the US, bringing new fans into the energy drink category. This move is in line with Coke’s efforts to deliver more beverage options that meet changing preferences, lifestyles and tastes.
The company will be offering Coca-Cola Energy; Coca-Cola Energy Cherry, a flavour available exclusively in the US; and its zero-calorie counterparts in 12oz sleek cans as of January 2020.
Earlier this year, Coca-Cola Energy was launched in Spain and Hungary. Currently, the energy drink is available in 25 countries including Great Britain, Ireland, Spain, Germany, Holland, Norway, Sweden, France, Belgium, Romania, Hungary and Australia.
Janki Gambhir, Coca-Cola trademark innovation brand director, said, “As a total beverage company, we’re constantly looking for ways to evolve our portfolio and bring people the drinks they want – in a range of categories and package options.”
“Coca-Cola Energy was developed by listening to people who told us they wanted an energy drink that tastes more like Coca-Cola than a traditional energy drink,” Gambhir further stated.
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Coca Cola India is planning to leverage on its packaged drinking water brand Kinley to take on small regional companies, which have been pecking away at its market share.
The world's largest beverage company is set to roll out a range of fruit juice-based fizzy drinks under the Kinley brand to help widen its affordable portfolio.
Named Kinley Fruitizz, the drink is the third low-cost product to roll out of the Coke stable in a year.
The company earlier launched Aquarius Glucocharge and Minute Maid Vitingo
The Coca-Cola Company has formed a new international group called Global Ventures. The unit is created to focus on ensuring maximum value from acquisitions and investments.
James Quincey, Coca-Cola Global Chief Executive Officer, said, "Acquisitions will continue to be an important tool for the company. This group will partner with colleagues around the world to identify and nurture the next series of fast-growing opportunities. We have created the group to ensure we properly connect and globally scale key acquisitions."
Coca-Cola, Nestle and Unilever are in the due diligence stage for acquiring GlaxoSmithKline Consumer's $4 billion Indian nutrition business, which includes malt beverages Horlicks and Boost.
"As with all M&As, completing the acquisition is only the first step. What is critical is accelerating our results and executing with precision," Quincey further said.
Aimed at cost savings, the Jubilant Food-Works (JFL) operated Domino’s Pizza may end its 20-year long exclusive deal with Coca-Cola in India to rope in PepsiCo. JFL is looking at boosting profitability as India is a critical market for Domino’s.
The Michigan-based single largest quick service restaurant chain, with a global footprint in 85 countries and 1,144 stores in India, had exclusive partnership deals with Coca-Cola worldwide. However, there were few exceptions such as Australia, New Zealand and Malaysia where it serves PepsiCo brands.
A JFL’s spokesperson said, “We have enjoyed a strong partnership with Coca-Cola India over the last 20 years. As we look to build our business for the next phase of growth, we have initiated a process to look at various options and identify the right beverage partner who can help strengthen our beverage portfolio and drive growth”.
Rivals such as Yum! Brands that operates Pizza Hut, KFC and Taco Bell has had a long-standing partnership with PepsiCo, while McDonald's has always been associated with Coca-Cola.
Beverages major Coca-Cola has intended to take its Indian soft drink brand Thums Up to neighbouring ASEAN countries including Pakistan, Sri Lanka, Nepal, a top company official confirmed.
As part of its larger expansion plans, Coca-Cola has already introduced its cola variant Thums Up in Bangladesh last month.
Besides, Coca-Cola India also expects Thums Up, which was acquired by it from Parle Bisleri in 1993, to become a USD 1 billion brand by the end of this year or probably by next year.
"We have launched Thums Up Charged already in Bangladesh. It is being scaled up across Bangladesh now. We have also launched Rim Zim already last month there,” Coca-Cola India and South West Asia President T Krishnakumar.
He further added, "Next we are planning to move to Nepal in the next couple of months with Thums up Charge. We are going to launch as big as in Bangladesh. Once we see success, we would take it to other markets."
On being asked about any specific markets Coca-Cola is looking is eyeing for the brand Thums Up, he said: "We believe that we can do the entire south Asian markets."
"We can go places like Sri Lanka also. Then we can talk to our global HQ and go to some of ASEAN countries. Even at a later date, we can look at possibly Pakistan also. We could have more and more markets in Asia," he added.
Coca-Cola would export the brand in those markets and would get it locally manufactured.
"We would give brand name and all the ingredients and most of the time it would be manufactured locally and but would carry the Thums Up brand," Krishnakumar said.
Last year, Coca-Cola said that it expects Thums Up to be a USD 1 billion (about Rs 6,500 crore) brand in the next two years.
"I think we are well on the way. By the end of this year, we would be close to it and in the worst case scenario, it would be 2019 we should get to $1 billion(brand)," he added.
He further said that another Indian brand Maza would be the next candidate from the stable of Coca-Cola India to join the USD 1 billion club but would take some more time.
Besides, Thums Up, Coca-Cola India is looking over the possibility to take three other Indian brands to global markets - Limca, Maza, and Rim Zim.
"These are four brands in our stable which have potential to (go to) other markets and we are obviously creating more and more products as Aquarius Gluco Charge, which has creations in India... It can also go out to other similar markets," he added.
The Maharashtra Food and Drug Administration (FDA) has prohibited McDonald’s from selling Coca Cola Zero across its 60 outlets in the state for violating norms of the Food Safety and Standard Regulations. The order was issued after the MNC was found selling the beverage that contains artificial sweeteners, suspected to cause health problems, without the mandatory warnings.
The FDA action came after a Kolhapur official found that the product was being sold loose to "unsuspecting clients", including children and pregnant women.
The key problem is the presence of two artificial sweeteners— aspartame and acesulfame potassium--suspected to cause obesity, insulin resistance and high BP, among other health impact. Since years of research have failed to establish the components as completely harmless, any product containing them is supposed to carry warnings.
The Coke Zero that was being sold at the McDonald’s outlets did not specify that the drink was not recommended for children or for phenylketonurics.
Dr. Harshdeep Kamble, FDA Commissioner, said, "For the latter, particularly, such a violation can be critical. Phenylketonuria is a rare genetic disorder and those who suffer from it cannot break down phenylalanine, a component of aspartame (one of the sweeteners). Their excess intake can lead to an unusual buildup in the body. Children can suffer from serious neurological deficiencies as a result of consuming the drink unknowingly."
Calling the contravention a "serious one", Kamble said non-adherence of the order can lead to penalties for the company.
Kamble said, "They can sell the Coke Zero cans like most other fast food outlets but not through dispensers."
He clarified the order won’t apply to other beverages as they don’t contain artificial sugar and have necessary permissions.
The drug regulatory body found out during investigations that Hardcastle Restaurants Pvt Ltd, which owns and runs McDonald’s, was procuring a pre-mix from Hindustan Coca Cola Beverages. However, McDonald’s was creating the final product by treating the mix with carbonated water. These sweeteners are also present in Diet Coke, said an FDA official.
A Spokesperson from McDonald's said, "We are compliant with all applicable laws pertaining to usage of loose cups and glasses. For the time being, we have decided to follow the FDA directive.”
The Hindustan Coca Cola, in their response to FDA, had said that they had all the requisite permissions to manufacture synthetic syrups containing artificial sweeteners for dispensers.
Kamble added that both the companies have some sort of an exclusive arrangement as far as the product was concerned as no other food outlet was found selling the drink though a dispenser. He said that Section 34 of the Food Safety and Standards Act empowers the commissioner to issue such a prohibition order. However, the diktat will not be applicable outside Maharashtra.
The FDA, in its order, has quoted a study by the Channing Division of Network Medicine, Brigham and Women's Hospital and Harvard Medical School, Boston, which stated that a daily consumption of diet soda increased the risk of non-hodgkins lymphoma and multiple myeloma in men by 42%. Another study quoted in the report spoke of a link between artificial sweeteners and metabolic abnormalities.
With the increasing consumer preference towards non- sugary drinks, Coca-Cola is all set to launch fizz-free packaged coconut water for its customers.
Coke is test marketing Zico in India. It is a US coconut water brand that the company acquired in late 2013.
Packaged coconut water is one of the fastest growing beverage categories in the world. The deal between Zico and Coke in 2013 has helped the company reach the top position in the segment.
According to the information on the website of the company, positioned as a ‘natural replenishment’, brand Zico has been gaining traction in world markets.
Coke is importing and testing the product in at least two Indian markets, two trade officials directly aware of the matter said.
Meanwhile, both Coke and rival PepsiCo are facing troubles in India with some trader associations in Tamil Nadu and Kerala.
Several kirana shops across Tamil Nadu either stopped selling bottled drinks of Pepsi and Coke or stopped placing fresh orders, following a decision that was taken by traders’ associations at the peak of the jallikattu protests in January.
The decision to ban the sale of Coke and Pepsi was taken by the associations during the jallikattu protest on the Marina in January as People for Ethical Treatment of Animals (PeTA) had opposed the bull taming sport.
An official of the trader's association said, "t is only an American organisation (read PeTA) which was responsible for the ban on jallikattu. That is why we decided to ban the sale of American soft drinks in the state."
The associations said the two US companies are drawing excessive water from the state for its bottling operations, which affected the scarce water sources.
Most shops in Madurai city are boycotting Pepsi and Coke, while a few say they are exhausting their stocks purchased months ago.
Manikandan, one of the shopkeepers of Chennai, said, "I have stopped selling Pepsi and Coke. But people are open to local alternatives, even products like buttermilk, as the days are getting hotter."
Meenakshi Sundaram of South Marret Street, a retailer of soft drinks, said their margins were better with Coke and Pepsi but now people are asking for local brands. “However, we have reduced our stocks since the jallikattu protests,” he said.
Meanwhile, the Indian Beverages Association (IBA) said it was deeply disappointed by the call to boycott products manufactured by Coca-Cola and PepsiCo India.
IBA said, "This call is against the proven fundamentals of robust economic growth, and against the clarion call of 'Making in India'. The boycott call also violates the rights of the consumer to exercise choice. The IBA has already clarified that both Hindustan Coca-Cola and PepsiCo India are local companies, registered in India and compliant to all applicable rules and regulations. They respect local culture and consumer sentiments."
On Wednesday, Hindustan Coca-Cola Beverages Pvt. Ltd (HCCB), the bottling arm of American beverages company The Coca-Cola Co., said it has acquired the Georgia tea and coffee business from Coca-Cola India Pvt. Ltd.
Effective October, the manufacturing and distribution of Georgia will be handled across the country by HCCB, the company said on the same day.
Georgia offers a range of premium hot and cold beveragesho, including fresh brew coffee, hot pre-mix flavoured tea, coffee, iced tea and cold coffee, through its vending machines. In India, it has already deployed about 5,000 machines in the past decade. Fast food restaurant chain McDonald‘s is one of Georgia‘s largest customers in India.
T. Krishna Kumar, chief executive officer of HCCB and regional director, bottling investment group said, At Hindustan Coca-Cola, our collective objective is to expand Georgia‘s reach by aggressively leveraging our strong distribution network.
We are excited about the potential of this product offering and are confident that it will further accelerate the company‘s growth in the years ahead.
S. Giri Sunder, vice-president, commercial beverages, HCCB, will lead the Georgia business. He will seek to leverage HCCB‘s core competency of sales and distribution reach to increase the market share of Georgia in the country.
Currently, the Georgia pre-mix is manufactured at the Hershey India facility in Bhopal which is the co-packer facility of HCCB.
On Thursday, Coca-Cola Co said it plans to sell nine production facilities to three of its largest independent bottlers as it seeks to unload low-margin assets and reduce manufacturing costs in the United States, reported by Reuters.
The company said it would create a new nationwide supply group that will include Coke and independent U.S. bottlers, Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Company United and Swire Coca-Cola USA, will acquire the nine plants, valued at about $380 million, from Coca-Cola Refreshments, which Coke created after buying its top bottler in North America in 2010.
Moreover, Coke said all four entities, along with Coke's operating group in North America, will form a new supply group to work together on decisions in areas such new packaging launches and ingredient purchases, Coke said.
The new group will represent about 95 percent of the company's production volume in the United States.
The world's largest soda maker is facing slow sales volumes in the U.S. It has been selling bottling operations, which partly entail getting its products to retailers, to franchisees to shift away from the capital intensive and low-margin business of distribution.
So far, though, it has not sold production facilities, where its concentrate is combined with other ingredients and bottled up. The sale of the plants, which produce soft drinks like Coke, Sprite and Fanta, is expected to take place between 2016 and 2018, Coca-Cola said.
"By selling production facilities, we expect (Coke) will generate higher return on invested capital as its capital base is reduced, and have incremental cash to reinvest and return to shareholders," said Bonnie Herzog, an analyst at Wells Fargo.
Coca-Cola Bottling Co will buy plants in Virginia, Maryland, Indiana and Ohio, Coca-Cola Bottling Co United will buy a plant in New Orleans and Swire will buy plants in Arizona and Colorado.
Coca-Cola Co is the largest shareholder in Coca-Cola Bottling Co with a 34.8 percent stake as of May. Coke shares were little changed at $38.81 in Thursday afternoon trading.
Coca-Cola says it will begin disclosing its investments in scientific research and advocacy about the impact sugary soft drinks have on public health, reported Reuters.
On Wednesday, according to The Wall Street Journal, Muhtar Kent, chief executive of Coca-Cola, said the company would assemble a panel of independent advisers on its financial support for academic research.
"As we continue to learn, it is my hope that our critics will receive us with an open mind," Kent wrote. "At times we will agree and at times we will passionately disagree."
The New York Times article revealed the financial ties between Coke and the Global Energy Balance Network, a nonprofit advocacy group that contends people worry too much about what they eat and not enough about how much they exercise.
Coca-Cola provided the seed money that started the group and its vice president, Steven Blair, appeared in a video in which he chastised "the media" for blaming overconsumption of fast food and sugary drinks for the country's high rates of obesity, diabetes and heart disease.
In the video, Blair said, "There's really virtually no compelling evidence that that, in fact, is the cause."
Blair, a professor at the University of South Carolina, suggested that the problem was not too many calories but rather not enough physical activity and exercise and Coca-Cola has spent millions of dollars over the past several years in marketing to persuade people to get more active and on improvements to parks and playgrounds around the country.
Suja Life LLC said that it had sold minority stakes to Goldman Sachs Group Inc's merchant banking division and to Coca-Cola Co, which will distribute its organic juices and smoothies, reported Reuters.
The details of the investments were not disclosed. Earlier, this month that Coca-Cola was nearing a deal to acquire a minority stake in Suja, valuing the company at about $300 million.
The deal illustrates Coca-Cola's determination to get into fast-growing beverage categories amid sluggishness in its soft drinks business in recent years, especially in the US market.
Coke said in a statement that its investment would expand its portfolio to "meet people's varying beverage needs."
It also would better position the Atlanta-based company to compete against PepsiCo Inc's Naked Juice brands.
Previous year, Coca-Cola said it was buying a 16.7 percent stake in energy drink maker Monster Beverage Corp.
It also invested in Honest Tea and Zico Coconut Water, eventually acquiring both companies.
In 2012 Suja was founded by four entrepreneurs, makes juices and smoothies under cold pressure to kill harmful bacteria and preserve nutrients and taste.
Investors in the San Diego-based company include Alliance Consumer Growth Partners and Evolution Media Partners and actors Leonardo DiCaprio, Jared Leto and Sofia Vergara.
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