Coca cola to acquire Chi by Q1’19, and partner with LaFarge to recycle used bottles   

21 September 2018 : By Q1 next year, the carbonated soft drink giant Coca-Cola is all set to acquire Nigeria’s leading juice company Chi Ltd.


As people are becoming increasing health conscious, the sales of carbonates soft drinks/ sugary sodas are declining exponentially. Consequently, in order to diversify their portfolio the US mammoth has decided to acquire the Juice brand.


Last month, sources confirmed that the Cola company agreed to buy Costa coffee for $5.1 billion, and sources familiar with the matter say it is also bidding for GlaxoSmithKline’s Indian Horlicks nutrition business.


In January 2016, Coca-Cola had bought a 40 percent stake in the Nigerian juice and snack producer with the aim to increase its stake in the firm within the next three years.


Juice sales form a central plank of the U.S. company’s attempt to proffer drinks at a range of price points in Nigeria to ameliorate affordability in a country where the company sees high inflation and modest economic growth in the coming year.


A country which emerged from its first recession in 25 years but is still trying to make ends meet, the consumers are extremely cash strapped. Hence, affordability has become a bigger issue that it was in the past and in order to smite the customer the company proposes to lower SKU’s in bottles and cans.

The company plans to launch a 300ml  bottle of Coke Zero for N 60 ($0.20), compared with the standard 500ml bottle for N 80


Another reason to diversify its product range is to attain more flexibility in a market where unemployment is high and the according to the United Nations, most of the population of 190 million lives on less than $2 a day.


There is only so low you can go with respect to price points in certain packaging formats, but when one starts taking into account pouches and still products, like juice and drinking yoghurts, one can start accessing much lower price points.”


DIVERSIFYING


Their drive to partner with Costa despite the absence of a “ hot-coffee” drinking culture is the belief that Nigeria is a growing and developing market that provides significant opportunities for ready-to-drink coffee in the form of 

iced coffee, blends of dairy and coffee, packaged in different formats. Also, since malt-based drinks are already in vogue,”Horlicks” another malt based beverage has the potential to do well in the continent.

 

But while the company was researching drinks from locally relevant ingredients, such as ginger, they were unable to see market for marijuana drinks - something the company has said it was closely watching in the past, and is also seemingly interested in.


Coca-Cola is planning to partner with cement-maker Lafarge to recycle used bottles by burning them in kilns as an energy source.The partnership will be finalized by Q4’18.


Consecutively, the company is also working with Lagos state government on marine collection to remove waste from waterways in the city, which is built on a lagoon.


Reporting for EasyKobo on Friday , 21 September 2018 in Lagos, Nigeria


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