Rabobank Report: Further Consolidation Expected In China's Soft
Beverages Market
NEW YORK, Nov. 16, 2012 /PRNewswire/ -- Rabobank has
published a new research report on the Chinese beverage market,
forecasting increased consolidations after the alliance of Tingyi
and PepsiCo.
In a new report titled "Survival Handbook: Strategies for
Success in China's Soft Drink
Revolution," Rabobank's Food & Agribusiness Research and
Advisory group says there is likely to be a wave of consolidations
in China's beverages market as it
responds to the USD 5 billion
alliance of Tingyi and PepsiCo, according a report from
Rabobank. Rabobank says that smaller, 'second tier'
beverages players will be affected most by the new alliance, as
they struggle to compete with Tingyi-PepsiCo's - as well as that of
fellow beverages giants Coca Cola and Wahaha - established
advantages in brand equity, distribution networks, supply chains
and investment capital.
Despite the dominance of Tingyi-PepsiCo, there are still
solutions for smaller beverages businesses to earn profits.
Rabobank expects smaller players to partner with each other to pool
resources, as well as focus on specific subcategories or specific
roles in the value chain.
Opportunities exist for international second-tier players to
partner with Chinese beverages companies with local know-how,
particularly those based in smaller, fast growing cities. An
example comes from Nestle who recently bought 60 percent of Xiamen
Yinlu Food, the leading producer of canned food and vegetable
protein drinks, and are leveraging the distribution network of
Yinlu to reach lower tier cities and penetrate other beverage
subcategories such as bottled water and ready-to-drink (RTD)
teas.
Several big or fast growing beverage subcategories such as
herbal drinks, RTD coffees and teas are excluded from the tie up
between Tingyi-PepsiCo and as such, smaller players are
accelerating their growth efforts in these areas. Over the
past five years, herbal drinks have been the fastest growing
beverage category in China, with a
compound annual growth rate of over 35 percent. If this
growth trend continues, it presents a significant opportunity to
beverages companies specializing in this drinks sector.
Moreover, with a large proportion of China's beverages giants' revenue coming from
carbonated soft drinks (CSDs), competitors are developing
advertising and marketing programs designed to highlight the
benefits of health drinks, as well as to disseminate negative
messages about the health effect of CSDs.
The Rabobank report on the Chinese soft drink market is
available to media upon request.
Rabobank Group is a global financial services leader providing
wholesale and retail banking, asset management, leasing, real
estate services, and renewable energy project financing. Founded
over a century ago, Rabobank is one of the largest banks in the
world, with nearly $1 trillion in
assets and operations in more than 40 countries, and is among the
highest rated private banks by S&P and Moody's. In North America, Rabobank is a premier bank to
the food, beverage and agribusiness industry. Rabobank's Food
& Agribusiness Research and Advisory team is comprised of
more than 80 analysts around the world who provide expert analysis,
insight and counsel to Rabobank clients about trends, issues and
developments in all sectors of agriculture.
www.Rabobank.com
SOURCE Rabobank