Friday, December 4, 2015

Coca-Cola’s Indonesia Investment Slows to a Drip

Coca-Cola is pumping out soft drinks at its plants in Indonesia, but it is slowing the rollout of capital spending.

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Coca-Cola's partner, Australian based Coca-Cola Amatil, has decided to reduce its investment in Indonesia, which is South Asia's largest market. Amatil had first agreed to invest $500 million US to in bottling plants to help grow the market. However, the Asian market is currently experiencing a slowdown and Amatail has decided to invest at the same rate as market share growth. The article goes on to describe the worldwide sales stagnant for carbonated beverages. According to the article, growth in demand for carbonated beverages has been reduced to a few points in the US, so has to focus in developing nations globally for growth. In addition to the lack of higher sales, Coca-Cola has to concern itself with the devaluation of currencies worldwide when compared to the dollar. The company is expecting that the devaluation of foreign currency to be responsible for a 7% drop in currency estimates. This article is directly related to Global Marketing as it speaks to Coca-Cola investing in bottling plants to be open in the local markets rather than having to ship its products overseas from the United States. The chapters that are mostly related to this article are 15, 18, and 12.

4 comments:

  1. Interesting. As I was reading your post, I thought it was going to conclude with you talking about the lack of sales being due to people trying to be more healthy. I would have never thought about the devaluation of foreign currency to hit Coke that hard.

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  2. This is an interesting article. I'm curious to see what Coca-Cola will do to increase sales in Indonesia.

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  3. The data regarding the slow growth rates in the US is intriguing. Could this simply be due to market saturation or, as Ayan posited, are health trends in the U.S. having an impact on soft drink consumption?

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