Coca-Cola sees further growth opportunities in Japan

Coca-Cola sees further growth opportunities in Japan Coca-Cola Japan President Tim Brett © Coca-Cola (Japan) Co Ltd

TOKYO —

Coca-Cola sees room for growth in Japan despite its plan to hike canned drink prices from April 1 in line with the increased consumption tax.

Tim Brett, president of Coca-Cola Japan, and his executives outlined the company’s strategy for 2014 at a news conference recently.

Brett said Japan had been a very successful market for Coca-Cola. “If you look back several decades, you see a market raised two times larger today than it was in the 1990s.” Yet, he said there were significant growth opportunities for the Japanese market.

The most immediate issue is the consumption tax increase. Coca-Cola Japan says it will increase prices of its canned beverages such as soft drinks and coffees from 120 yen to 130 yen sold from vending machines when the 3% hike in the consumption tax takes effect on April.

The 10-yen hike is more than 3% but the company has no choice since the machines cannot handle 1 and 5 yen coins, executives said at a news conference. However, the price of natural water called “I・RO・HA・SU” will remain the same so they can offset the 10 yen price increase for vending machine products.

Coca-Cola will introduce a new PET bottle which contains 525 ml to replace the original 500 ml bottle. This new bottle will contain tea brands Sokenbicha, Ayataka and Taiyo-no-Matecha ― sales of which are relatively higher than other beverages, executives said.

Another plan is to produce lower priced and smaller products. For example, a 170-gram can of Georgia Emerald Mountain coffee drink will be sold for 110 yen in vending machines, while Coca-Cola and Coca-Cola Zero will be sold in 250 ml cans also for 110 yen.

Vending machines equipped with electronic money sensors will give a 5 yen discount promotion for all products.

The new packaging and pricing policies are some of the changes Coca-Cola will implant this year. Although the iconic brand has the largest market share of carbonated beverages in Japan, Toshiro Akiyama, executive manager, said, “We still have more room to expand because the percentage of Japanese consumers who regularly drink Coca-Cola is currently only 20%.”

A new marketing campaign for Coca-Cola Zero has already started, with a TV commercial featuring EXILE, one of the most popular vocal & dance groups in Japan. In April, new members of the group will be introduced to the public at an event in collaboration with Coca-Cola.

One of the company’s new projects is a year-around event called “Taste Test,” which is for consumers to try and find differences between regular Coca-Cola and Coca-Cola Zero. Another campaign will be held in conjunction with the FIFA World Cup, starting March 3 and lasting until after the World Cup in mid-July.

By conducting events at community level, the goal is to develop bonds with their consumers while providing children with a healthy lifestyle through Coca-Cola products and sports.

Marketing plan for coffee

Coca-Cola’s coffee sector consists of three brands—Georgia Emerald Mountain, Georgia European and LUANA.
This year is the 20th anniversary for Emerald Mountain, which has the largest market share in the Japanese canned coffee business. As the market is supported mainly by “working men,” Coca-Cola has created a catchphrase that says, “The world consists of someone’s job” (世界は誰かの仕事でできている). Coca-Cola will issue a weekly online magazine for smartphones called “Weekly Georgia” (週刊ジョージア).

The other Georgia product, European, targets picky consumers who seek the quality of homemade coffee. The company will launch a newly developed European canned coffee in April.

LUANA is a relatively new brand, which made its market debut last May, targeting the youth segment and women, who like to frequent fashionable cafes. With this drink, Coca-Cola is focusing on convenience stores located in major train stations. Its sales are almost outperforming Georgia brands. The newest line is Cafe Mocha, flavored with macadamia nuts.

Marketing plan for tea

Shunji Fukue, vice president of Coca-Cola Japan, said, “Our tea business grew very well last year and we would like to accelerate it this year as well.” Along with Georgia Emerald Mountain, Sokenbicha is celebrating its 20th anniversary this year. The company has brought back its original package from 1994.
Taiyo-no-Matecha, whose sales began three years ago, will be part of a FIFA World Cup promotion, making the most of the Brazil boom, as an “official healthy tea.”

Finally, “Tokuho W,” Coca-Cola’s newest tea product, claims to absorb fat and sugar. It debuts in the market on April 7.

Japan Today

  • 2

    SamuraiBlue

    Amusing since for Coca Cola, business in Japan consists anything besides Coca Cola(the drink).

  • 6

    avigator

    I can proudly say that I have been soda free for many many years.

  • 2

    Nenad Jovanović

    Also, I dont drink Coca-Cola nor Pepsi-Cola, nor any other soda drink, its sad that unhealthy food (McDonald ) and unhealthily drink ( Coca-Cola) are top representative of American culture in food area .

  • 3

    sighclops

    The other Georgia product, European, targets picky consumers who seek the quality of homemade coffee

    Not sure what they're drinking at home, but that is not coffee. Far from it. Georgia is basically Coffee "flavouring", UHT milk and tonnes of sugar.

  • 3

    Junichi

    Brown bubbly sugar-water about to become even more overpriced that it already is in Japan.

    Why is it so profitable here? Less soda competition compared with the US?

  • 2

    Brainiac

    I like the Fanta line but they keep changing the flavors every couple of weeks.

  • 2

    kaimycahl

    I read in the US they are taking soft drinks out of school because they have found that kids drink less water and soft drinks and sports drink with loads of sugar is one of the cause of child obesity in the US. Because the numbers are now going down they have to take the coke show to Japan just like the tobacco industry did when the US clamped down on smoking. The number of smokers decreased in the US and the numbers climbed in Japan!

  • 0

    Ranger_Miffy2

    Growing up, my family finished the dinner meal with a nice bottle of Coke or Pepsi. Can you believe it? Yes, I had plenty of cavities as a kid. Once I moved out, I became aware of the contents, and that I really did not like the taste and sugar, so don't drink them at all. Y'know, plain water is pretty good! And adding plant material like ocha, peppermint, etc., is truly tasty and satisfying. That's all we need.

  • 0

    Tom_Mix

    Coca-cola is okay, but there are so many other and better sodas out there. I wish Japan would discover them. I would love to have some RC available here.

    As it is I now drink mostly a brand called American Cola available at Don Quixote. Its cheap, half the price of a Coke, and unlike nearly all Coca-cola drinks, is not laced with caffeine.

    In case you were thinking caffeine is perfectly safe, I discovered it gives me migraines where I lose half my vision in a sparkly blank field and I get dizzy for an hour. At first I thought I was having mild strokes and it was as bad although with apparently only temporary effects . And that occurred after decades of mostly drinking Coca-cola as anything else is hard to find here. Don't be fooled. Caffeine is not your friend.

  • 1

    Strangerland

    Don't be fooled. Caffeine is not your friend.

    And sodas are? They have zero nutritional benefit, and the sugar is bad for the body. You'd be best cutting all sodas out of your life, not just coke.

  • -1

    Novenachama

    Soda is one of the worst drinks you can consume. It can elevate your insulin level and elevated insulin levels are the foundation of most chronic disease. Many brand-name sodas actually contain 65 percent fructose which is a cheap sweetner far more deadly than sugar. Thus consuming fructose is essentially consuming fat and that is linked with obesity and related problems. Therefore one of the simplest ways to radically improve your health is to quit drinking soda. Pure water is a much better choice, or if you must drink carbonated beverage, try sparkling mineral water with some lime or lemon juice.

  • -2

    Jonathan Prin

    You should drink soft drinks only if you spend (a lot) of calories. It is perfectly ok then. That is my example. If you drink without reason, then you get really into health trouble quite quickly...example is my brother.

    Sports is all. Diet adaptation to your activity is key. Just study to understand the relevant body mechanisms. Don't only spit on products because there is sugar in it.

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