JAPAN: Soft drinks companies may face hit from earthquake
The Coca-Cola Co and PepsiCo both have sales exposure to Japan
Global soft drinks companies are likely to feel the effects of the earthquake that struck Japan late last week, with many having meaningful sales exposure to the country.
Japanese brewers have suffered significant damage as a result of the earthquake and subsequent tsunami, with Kirin Holdings, Asahi Breweries and Sapporo Breweries all reporting extensive damage to their facilities.
There is more limited information on damage to international soft drinks companies' operations in the country, but they are also likely to also feel some effects.
According to Bernstein Research, Japan is a highly profitable market for Coca-Cola Co. Around 13.5% of its annual operating profits are derived from the country. Of company sales, around 9% are weighted to Japan. For PepsiCo, this is slightly lower, with Japan accounting for 2% of annual global sales.
Coca-Cola spokesperson Kenth Kaerhoeg told just-drinks yesterday (16 March): "The Coca-Cola system in Japan continues to focus on the safety and well-being of our employees, and we continue to assess the conditions of our facilities in the hardest hit regions." He declined to comment on damage to Coca-Cola facilities.
The firm said it has pledged JPY600m (US$7.3m) in cash and product donations to the relief effort, and is supporting the government's request to conserve energy by converting television and radio advertising to public service announcements.
PepsiCo could not be reached for comment.
Government officials haveTokyo, Japan's capital, faces widespread blackouts as a result of a loss of power from the earthquake and subsequent tsunami, which have left thousands dead and many more homeless. Today, authorities continued efforts to contain the spread of radiation from a nuclear power plant damaged by the quake.
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