Soft drink giants, Coca-Cola has bought a 40% stake in Chi Ltd, the makers of the popular Chivita range of fruit juices. It is believed that Coca-Cola is looking to further expand its presence in frontier markets and mitigate slowing soda sales in developed markets. The US company intends to complete a 100% buyout of Chi within three years according to reports.
According to reports, the stake was acquired from TGI Group (Tropical General Investment) a majority shareholder in Chi Ltd.
Interestingly, the Chivita drinks displaced Coca-Cola’s Five Alive as the most popular juice drink in Nigeria in the early 2000’s following the Government of President Olusegun Obasanjo’s decision to ban imported juice.
GDP growth rates across key markets, including Nigeria, have been high for the past decade, fuelled by demographic growth and high commodity prices and the drinks giant is investing around $17bn in Africa between 2010 and 2020 as it looks to tap into high economic growth rates and an expanding consumer class in Nigeria and other African countries. Coca-Cola currently has around 145 bottling and manufacturing facilities in Africa.
In a press release, Kelvin Balogun, President of Coca-Cola Central, East and West Africa, said: “We are extremely optimistic about Africa’s continued economic and social growth and recognize the importance of ensuring we stay one step ahead of evolving consumer tastes by broadening our portfolio and introducing new products.”
Also in a joint statement by Chief Public Affairs and Communications Officer, The Coca-Cola Company, Dan Baxter, and Head of Performance Management Group, TGI Group of Companies, Dr. Johannes Flosbach, both companies said the agreement creates a strategic relationship within Africa’s largest economy that together serve Nigeria’s most popular sparkling soft drinks, juices, value-added dairy and water beverage brands.