Coca-Cola launches US$9 bottled water in China, but will it sell?.
Coca-Cola has quietly launched its super-luxurious Swiss sparkling water – at twice the cost of a venti cappuccino from a well-known coffee chain – in China, but the question is will consumers from the world’s second largest economy fall for it.
Called Valser, the water appeared in the US soft drinks giant’s store on Chinese online marketplace Tmall two weeks ago, with an advertisement highlighting its source: “Switzerland.” The price for its 750ml Classic bottle is 64 yuan (US$9.29), which will get you two Starbucks cappuccinos in Beijing’s Wangfujing shopping strip or three McDonald’s burger meals.
The soft-drinks titan acquired Valser in 2002 for US$2.6 billion, though the Swiss water brand is little known outside its home, mostly available in upmarket retail outlets in cities such as Zurich and Geneva.
With consumer demand for sugary drinks sinking, Coca-Cola and its rival Pepsi have struggled to shore up sales of carbonated soft drinks by cutting the amount of sugar, while building up their bottled water businesses.
James Quincy, the company’s new chief executive, stressed in February that water and still drinks would be the focus of the Atlanta-based company.
“The underlying trend [of stills] is even better than what we jumped at in volume,” he said.
“The strategy is to participate in the categories of highest value in revenue and profitability.” In 2013, China overtook the United States to become the world’s biggest bottled water market by volume, growing from 19 billion litres annually to 37 billion litres from 2010 to 2015.
It is only in the past few years that Evian, Fiji and Perrier, two brands from France and one from Fiji, have gained a foothold in China, where the urban middle classes are in a race to upgrade everything they eat, drink and use.
The price of a 500ml bottle of Fiji is about 10 yuan, still way below Valser.