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The main result of the Costa Coffee Group's acquisition of 3.9 billion pounds of Coca-Cola from Whitbread will not involve the shift to distribution, but rather the provision of coffee to fast food customers by the chain British logistics. meet consumer demand for hot coffee drinks.
"The retail work is not necessarily the biggest attraction," said John Murphy, president of the Asia-Pacific region at Coca-Cola. Being able to supply coffee products to larger customers – mainly fast food companies that want to diversify the proposed range of beverages – is a major benefit of the deal, he added.
The Costa transaction – the largest acquisition of Coca-Cola in eight years – is the latest effort by the multinational to diversify soft drinks, which still account for almost three quarters of sales but are increasingly monitored. drinks.
"We must continue to strengthen our basic offering by innovating, listening to the consumer and adapting our recipes. But in the same vein, we must be willing to recognize that our core portfolio is not meeting all drinking opportunities, "Murphy said.
While the Atlanta group owned a coffee business in Japan and South Korea, Costa will offer expertise in coffee processing, from grain supply to milling, Murphy said. "The quality of their finished product. . . tests very well with consumers.
Coca-Cola is also interested in Costa's range of vending machine formats, which address different store formats, as well as their pod activities. "We do not have a pod solution yet that allows us to access the offices or the host sites. We think there is a lot of potential in this area, "Murphy said.
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Operation Costa, which will help expand Coca-Cola's portfolio, is playing on the changing demand of Asian consumers. Buyers in the region – who tend to have a "wide" palate for beverages – will be looking for more diversified products as the middle class grows, urbanization accelerates and technology evolves, " said Murphy.
The deal will also help Coca-Cola remain competitive in Asia, where there is "pent-up strong demand" for tea and coffee products, which the soft drink industry has always struggled to offer.
"Other coffee companies have a lot to do in Asia. It will be a very dynamic battlefield for the next few years, "Murphy said.
But Asia is particularly sensitive to the increased consumption of high-sugar drinks, with about 1 billion people overweight or obese in the region. This is a problem that, according to the Asian Development Bank, has reached "epidemic levels", costing the region about $ 166 billion a year.
Coca-Cola is taking "deliberate steps" to reduce sugar levels in its original products while increasing the number of sugar-free beverages, said Murphy, who believes that working with local authorities is essential to process.
In Asia, he believes that Coca-Cola's collaboration with the Singapore Health Promotion Council is exemplary. "I would love to see more on other markets."
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