By CultureBanx Team
In 2016, Coca-Cola bought a 40% stake in Chi juice
Nigeria’s population of 190 million lives on less than $2 a day
Coca-Cola (KO +0.09%) is rapidly making acquisitions that could transform the company and diversify from its core business of sugary sodas. The beverage giant plans to buy-off the rest of Nigeria's Chi juice in 2019 for an undisclosed amount.
Why This Matters: Chi is Nigeria’s largest juice maker, known for its Chivita and Hollandia juice, dairy and yoghurt drinks. In 2016, Coca-Cola bought a 40% stake in Chi with the aim to increase ownership within three years.
Peter Njonjo, president of Coca-Cola’s West Africa business told Reuters the company is focusing on smaller bottles and cans which is another way the company is trying to entice cash-strapped consumers in Nigeria. The company could introduce a 30 centilitre bottle of Coke Zero for 60 naira ($0.17), compared with the standard 50 centilitre bottle for 80 naira ($0.22). It’s important to find a better price point since the United Nations estimates most of the population of 190 million lives on less than $2 a day.
The country continues to suffer from sluggish growth and high inflation. “Affordability will start becoming a bigger issue in this market than it was in the past. As a company, that is what we need to factor in as we are thinking about the future of our business in Nigeria,” said Njonjo.
Situational Awareness: Two other recent moves by the company include a $5.1 billion acquisition of U.K.-based Costa Coffee, the second-biggest coffee chain in the world after Starbucks, and then the company held talks with Aurora Cannabis about producing a cannabis-based beverage. Also, earlier this year the company launched its first alcoholic beverage, known as chu-hai in Japan and they acquired Australian kombucha maker Mojo.
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