Coca-Cola sees further growth opportunities in Japan

Coca-Cola sees room for growth in Japan despite its plan to hike canned drink prices from April 1 in line with the increased consumption tax.

Tim Brett, president of Coca-Cola Japan, and his executives outlined the company’s strategy for 2014 at a news conference recently.

Brett said Japan had been a very successful market for Coca-Cola. “If you look back several decades, you see a market raised two times larger today than it was in the 1990s.” Yet, he said there were significant growth opportunities for the Japanese market.

The most immediate issue is the consumption tax increase. Coca-Cola Japan says it will increase prices of its canned beverages such as soft drinks and coffees from 120 yen to 130 yen sold from vending machines when the 3% hike in the consumption tax takes effect on April.

The 10-yen hike is more than 3% but the company has no choice since the machines cannot handle 1 and 5 yen coins, executives said at a news conference. However, the price of natural water called “I・RO・HA・SU” will remain the same so they can offset the 10 yen price increase for vending machine products.

Coca-Cola will introduce a new PET bottle which contains 525 ml to replace the original 500 ml bottle. This new bottle will contain tea brands Sokenbicha, Ayataka and Taiyo-no-Matecha ― sales of which are relatively higher than other beverages, executives said.

Another plan is to produce lower priced and smaller products. For example, a 170-gram can of Georgia Emerald Mountain coffee drink will be sold for 110 yen in vending machines, while Coca-Cola and Coca-Cola Zero will be sold in 250 ml cans also for 110 yen.

Vending machines equipped with electronic money sensors will give a 5 yen discount promotion for all products.

The new packaging and pricing policies are some of the changes Coca-Cola will implant this year. Although the iconic brand has the largest market share of carbonated beverages in Japan, Toshiro Akiyama, executive manager, said, “We still have more room to expand because the percentage of Japanese consumers who regularly drink Coca-Cola is currently only 20%.”

A new marketing campaign for Coca-Cola Zero has already started, with a TV commercial featuring EXILE, one of the most popular vocal & dance groups in Japan. In April, new members of the group will be introduced to the public at an event in collaboration with Coca-Cola.

One of the company’s new projects is a year-around event called “Taste Test,” which is for consumers to try and find differences between regular Coca-Cola and Coca-Cola Zero. Another campaign will be held in conjunction with the FIFA World Cup, starting March 3 and lasting until after the World Cup in mid-July.

By conducting events at community level, the goal is to develop bonds with their consumers while providing children with a healthy lifestyle through Coca-Cola products and sports.

Marketing plan for coffee

Coca-Cola’s coffee sector consists of three brands -- Georgia Emerald Mountain, Georgia European and LUANA. This year is the 20th anniversary for Emerald Mountain, which has the largest market share in the Japanese canned coffee business. As the market is supported mainly by “working men,” Coca-Cola has created a catchphrase that says, “The world consists of someone’s job” (世界は誰かの仕事でできている). Coca-Cola will issue a weekly online magazine for smartphones called “Weekly Georgia” (週刊ジョージア）.

The other Georgia product, European, targets picky consumers who seek the quality of homemade coffee. The company will launch a newly developed European canned coffee in April.

LUANA is a relatively new brand, which made its market debut last May, targeting the youth segment and women, who like to frequent fashionable cafes. With this drink, Coca-Cola is focusing on convenience stores located in major train stations. Its sales are almost outperforming Georgia brands. The newest line is Cafe Mocha, flavored with macadamia nuts.

Marketing plan for tea

Shunji Fukue, vice president of Coca-Cola Japan, said, “Our tea business grew very well last year and we would like to accelerate it this year as well.” Along with Georgia Emerald Mountain, Sokenbicha is celebrating its 20th anniversary this year. The company has brought back its original package from 1994. Taiyo-no-Matecha, whose sales began three years ago, will be part of a FIFA World Cup promotion, making the most of the Brazil boom, as an “official healthy tea.”

Finally, “Tokuho W,” Coca-Cola’s newest tea product, claims to absorb fat and sugar. It debuts in the market on April 7.

© Japan Today