Following news this week that The Coca-Cola Co is to open a still beverage production plant in China - the company's largest single investment in still beverage production facilities in the country - we take a look at five facts associated with the growth of the Chinese soft drinks market.

  1. The market for soft drinks in China increased between 2001-2006, growing at an average annual rate of 14%. The leading company in the market in 2006 was The Coca-Cola Co. The second-largest player was Robust Group with Groupe Danone in third place. By 2008, the growth rate had slowed slightly to 12.7% with the leading company being Groupe Danone followed by Tingyi (Cayman Islands) Holding Corp in second place and Coca-Cola Company in third place.
  2. The Coca-Cola Company's built its first bottling plant in China in the decade following World War I and was the first US company to distribute its products in China after Deng Xiaoping opened the country to foreign investors in 1979. Today, Coca-Cola has an ownership stake in around 24 bottling joint-ventures - in most cases indirectly through two Hong Kong-based companies that it partly owns: Swire Beverages and Kerry Group.
  3. PepsiCo has been doing business in China for nearly 30 years. Last year, the company announced plans to invest $1bn in the country over the next four years. In June 2009 PepsiCo then announced plans to open a new factory in China, with another five expected to be built over the next two years as it attempts to boost business in the world's most populous country.
  4. The development of tea-based soft drinks, mostly fruit flavoured, have become more successful in China. Strong marketing, especially at younger generations, and by linking brands with healthy lifestyle images and sporting interests, have been crucial in boosting the strong rise in the sales of these products. Now, soft-drinks companies are looking to shift their emphasis away from colas and other carbonates, developing more fruit juices, tea drinks, waters and new herbal drinks, designed primarily for the China market.
  5. During 2008, China suffered natural disasters including snowstorms and a major earthquake in the first half of the year, together with the global financial turmoil later in the year. In 2008, total volume growth slowed slightly, according to Euromonitor, but remained dynamic largely due to the perceived 'essential' nature of many soft drinks, a huge number of new product launches and strong marketing activities by manufacturers. The sale of soft drinks is expected to be slightly impacted by the economic slowdown, however, due to the established daily consumption of these products, soft drinks tends to be more resilient compared to perceived less 'essential' items.