(Spiceup-News) Jan. 3- Coca Cola China sold its non-aerated beverages business to Cofco Group company China Foods Limited and Swire Pacific on Jan. 1 in a bid to boost production management efficiency.
Simply speaking, Coca-Cola sold its non-aerated beverage business in China. The non-aerated beverage business here refers to manufacturing companies and branches of the Coca-Cola China system located in 13 cities including functional water, fruit juices, tea beverages, dairy beverages and coffee. Coca-Cola China handed over its production line to other companies.
Coca-Cola’s business model is not complicated. It produces syrup which is given to factories to make beverages. Then it distributed to various sale channels and finally delivered to consumers. Coca-Cola used to operate 10 bottling plants and, occupied about 1/3 of the market. The rest of the bottling plants were in the hands of Coca-Cola’s joint ventures with Swire and COFCO.
Coca-Cola sells its some business all over the world nowadays. For example, the Coca-Cola’s bottling business in Vietnam and Cambodia was sold to Swire. According to Coca-Cola’s plan, the company will put 100% of its bottling business under franchising model in the future.
Doing business is all about a scale effect. In fact, Coca-Cola’s prices have been able to remain stable for many years. It also benefits from the scale effect. Is the formula and the brand important , or the production and marketing system important for Coca-Cola? Obviously, Coca-Cola China chose the former options.
Robert, the legendary president of Coca-Cola, once said. If the entire Coca-Cola plant was destroyed by fire overnight, giving me three months and I could rebuild the complete Coca-Cola company. The industry chain is integrated, but also it brings potential risks. The land, machinery and labor for the plant are all replacement assets.
The change will optimize production management efficiency and enhance supply chain linkage, Coca Cola China said, adding that it will not affect market supply or consumers in various regions.