Coca-Cola and Fonterra alliance presents new growth opportunities in ready-to-drink beverage category in Southeast Asia, says GlobalData

Following the news that Coca-Cola Vietnam Beverages Ltd. (Coca-Cola Vietnam) has forged a strategic alliance with New Zealand-based multinational dairy co-operative Fonterra to launch three ready-to drink ‘Nutriboost’ UHT milk products in Southeast Asia, starting with Vietnam,

Shagun Sachdeva, Consumer Research Analyst at GlobalData, offers her view:

“The rationale behind Coca-Cola partnering with Fonterra is part of its strategy to evolve into a total beverage company by diversifying away from drinks with high sugar content in line with evolving consumer demand. Fonterra will contribute its patented ingredients, tested product formulations, dairy expertise and distribution efficiency to manufacture and supply the new range of products.

“In addition, Fonterra is scouting for joint ventures in which it does not need to inject capital. The co-op can leverage Coca-Cola’s brand name to enhance its own product line and bring desirable products which reverberate with millennials across wider Southeast Asian markets.

“The strategic alliance presents a key growth opportunity for the partners to capture the rapidly growing dairy beverage market in Southeast Asia. It allows them to tap into the consumers’ rising and diversified demands for nutrient-rich products in the region. The companies plan to launch other products in Indonesia and Thailand in the near future.”

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