Atlanta-based Coca-Cola Co. and its Chinese bottling partners plan to invest an additional $4 billion in China over the next three years, on the heels of major investments to build brands and plants in the world's most populous country.
China represents about 7 percent of Coca-Cola's global volume. With the expansion of the middle class and the increasing popularity of the Coca-Cola brand in China, that importance figures to grow in coming years. China's 1.34 billion people are key to Coca-Cola's plan to double its revenue by 2020.
By the end of this year, Coca-Cola and its Chinese bottlers will have invested more than $3 billion in China over the past three years, bringing the total investment in China to $7 billion between 2009 and 2014.
Coca-Cola has doubled its sales in China in five years. It sold a billion cases of beverages in 2006, and it matched that number in the first half of this year. Its Minute Maid Pulpy is the largest juice brand in China and became Coca-Cola's first billion-dollar brand from an emerging market. The company has more cold drink equipment in China than at any other time in its history, chief executive Muhtar Kent told analysts last month.
Coca-Cola's business in China continues to evolve quickly, Kent said. "We're investing for the long term," he said.
The Coca-Cola China system opened five plants in China in 2009-2010. This year, the system opened a new plant and plans to open another later this year. It will break ground on another soon. Coca-Cola and its bottlers now operate 41 plants in China, employing more than 48,000 people.
Mason Cargill, a partner at Jones Day in Atlanta who has traveled to China for business since 1987, said the three-decade trend of U.S. companies investing in China has intensified over the past five to 10 years.
"The big consumer products companies -- Coca-Cola, Procter & Gamble, Unilever, Starbucks -- they're all over the place and they've been in China a long time," Cargill said. "They've spent a great deal of money building up their China business. Corporations in all types of businesses are going to China."
