In order to expand and diversify, Coca-Cola has joined the African market in partnership with Chi Ltd, Nigeria’s largest juice and dairy maker. According to the African Business Review, U.S. consumption of soda has dropped by 25 percent, whereas Africa’s consumption of juice and soda has grown by 21 percent. Thus, it is no surprise that Coca-Cola wants to expand in Africa and open itself to non-soda markets in the process.
The merging of Coca-Cola and Chi Ltd will provide new employment opportunities, as well as increase investments into the Nigerian economy. Business Wire claims, “The agreement will allow both companies to leverage their respective investments and expertise to further drive innovation, optimize efficiency and strengthen route-to-market to accelerate growth and increase consumer availability and choice.”
Coca-Cola’s desire to diversify and join the African market is also based partly on the fact that the brand has come under fire recently for allegedly contributing to the obesity crisis. The World Health Organization has encouraged governments to place a tax on sugary drinks, similar to Mexico’s 10 percent tax.
However, by partnering with Chi Ltd, Coca-Cola can transform their market and adopt a new high-growth value dairy category. Nathan Kalumbu, president of Coca-Cola’s Eurasia & Africa Group, is thankful for this opportunity and states, “For more than 30 years Chi’s leadership has built a greatly admired business that has quickly grown to become Nigeria’s leading producer and distributor of value-added dairy and juice products and we are delighted to enter the next phase of our growth journey together.”
Coca-Cola wants to gain back the trust of consumers and Chi Ltd is one of Nigeria’s most admired companies in the domain of food and beverages. Chi Ltd’s products help cater to the diverse needs and palates of every segment of Africa’s dynamic population. Through the African market, Coca-Cola has a fresh start and Chi Ltd has the resources and connections necessary to succeed and expand.
– Megan Hadley