What do you get when you mix Sprite and green tea? If you're Coca-Cola, you hope to get more buzz in the world's largest single market.
With the recent launch of "Sprite Tea" in China after more than a year of planning, Coca-Cola has combined two of the most popular beverages in the country of 1.34 billion people. Sprite is China's top-selling soft drink, outpacing Coca-Cola, Pepsi and all others. Green tea has been a mainstay drink in the Middle Kingdom for thousands of years.
Sprite has maintained seven straight years of double-digit growth in China, which is now the brand's largest market. Meanwhile, consumption of ready-to-drink teas in China has risen more than 30 percent annually in recent years, according to Coca-Cola. Mixing the two is a bid to keep Sprite rolling, especially among youngsters.
It "taps into the combined popularity of green tea and Sprite," Coca-Cola CEO Muhtar Kent said Tuesday.
Coca-Cola's growth in China slowed to single digits in the first quarter, breaking a streak of double-digit gains. But averaged over the last six months, the company's volume grew 16 percent in China. That growth added more than 100 million cases of drinks to the company's sales, Kent said.
Coca-Cola is not alone in trying to entrench itself in China. Arch-rival PepsiCo is betting that the introduction of Mountain Dew and Pepsi Max will help it grab market share. PepsiCo also has received approval to build more than a dozen new plants in China to supplement its current ones near the coasts.
"Pepsi clearly has ambitious plans for China," Consumer Edge Research said in a recent report. "We will have to watch whether [Pepsi] has the ability to expand beyond its current geographic footprint and product portfolio."
Asked whether Sprite Tea could spread to other markets, Hong Kong-based Coca-Cola spokesman Kenth Kaerhoeg said, "There is certainly interest in Sprite Tea outside China. In many Asian markets both Sprite and green tea are very popular beverages, but we do not comment on potential future launches."
Coca-Cola plans to back up Sprite Tea with television commercials, online materials, outdoor advertising and in-store displays. Plus, it will give out 15 million free samples, its largest-ever sampling of new products in China. Andres Kiger, senior marketing director of Coca-Cola Greater China, said the plan is to "let Sprite Tea speak for itself."
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