Market trends

Background

Fonterra and Coca-Cola team up

New Zealand dairy giant Fonterra and Coca-Cola have formed a strategic alliance to target the growing dairy and beverages markets in Asia.

The move has multi benefits for each company as the joint venture will capitalise on Fonterra’s dairy nutritional knowledge and Coca-Cola’s expertise in market sales and distribution. It will also help Coca-Cola move away from its historic production of sugary drinks in line with higher consumer demand for more healthy drinks.

Photo: Coca-Cola Vietnam
Photo: Coca-Cola Vietnam

Range of dairy based drinks

A new range of dairy based products are being launched by the business partnership initially targeting the market in Vietnam. These include a range of dairy based ready to drink products for children and breakfast drinks for adults being marketed under the Coca-Cola Nutriboost brand. This brand is already well known in Vietnam, offering customers a combination of milk and fruit juice products ready to drink.

Becoming the fastest growing

Judith Swales, chief operating officer of Fonterra’s global consumer and food-service business, said: “Both Fonterra and Coca-Cola are committed to disrupting and accelerating the growth of the dairy ready to drink category in south east Asia. “Dairy has become one of the fastest-growing beverage categories in south-east Asia. The demand is being driven by consumers increased focus on health and wellness and the category is expected to grow on average at more than fiver percent each year between 2016 and 2020.”

Coca-Cola says this new alliance is in line with its long term strategy to become a total beverage company.

Next steps

Iain McLaughlin, president of Coca-Cola company’s Association of Southeast Asian Nations (ASEAN) business unit, said: “We believe the value added dairy beverage category offers a significant opportunity for growth in the region and the expanded Nutriboost range is the first step in our combined efforts, with Fonterra, to deliver winning new products for consumers.” According to both companies the future goal is to explore further opportunities to develop products under Fonterra’s Anchor brand as well as other products to target markets in Indonesia, Thailand and the Philippines.