just-drinks.com March 1, 2010
Issue 512

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Editorial

Olly Wehring

It was a week of bombshells on just-drinks last week. The biggest came on Thursday (25 February) when Coca-Cola Co announced that it would acquire the North American operations of Coca-Cola Enterprises.

Given PepsiCo's deal to acquire its own major bottlers, which coincidentally was completed at the end of last week, we should probably not be too surprised to learn that Coca-Cola is treading a similar path. But, the firm's previous briefings against such a move kept many observers in the dark.

Coca-Cola's move only includes North America, so it's not as far-reaching as PepsiCo's deal. However, both firms expect to reap similar levels of synergies from their respective buyouts and the moves are certainly set to change the face of the North American soft drinks industry.

On a strategic front, both companies need to cut costs in a North American market that is stagnant from a volume point of view. Extra funds are required for the push into emerging markets like China, Russia and India. At the same time, the continent's soft drinks market is no longer just about Coke and Pepsi - the diversity of functional drinks, energy drinks and waters demanded by today's consumers necessitates that the firms bring their bottling operations in-house to make them more efficient.

The other bombshell dropped earlier in the week, when Diageo launched a startling tirade against Bacardi in the row over Captain Morgan's move to the US Virgin Islands. The 13-page press release made for fascinating – albeit exhausting – reading, serving as the latest twist in a complex and continuing saga. For the best possible explanation about just what the heck is going on, click here.

And keep it tuned to just-drinks for all future developments.

Until next time...

Olly Wehring, Managing Editor

Web: www.just-drinks.com
Email: editor@just-drinks.com

Twitter: just_drinks

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