Consumer China

Fruit juice – Turning sweeter

  • Published 22 Apr 2010

The market feeds off a snowballing fashion for healthy living among the expanding middle class.

It is easy to see why Coca Cola (KO:NYSE) was ready to pay as much as $2.4bn (Rmb 16.4bn, €1.78bn, £1.57bn) to acquire a controlling stake in Huiyuan, the Chinese juice company last year. China's fruit juice market lies at the intersection of a few of the country's most compelling consumer themes. With just one litre of fruit juice drunk on average per person per year – compared with around 50 litres in Europe and 30 litres in the US and Russia – the market taps into China's vast developmental potential. It also feeds off a snowballing fashion for healthy living among the expanding middle class. Lastly, the juice industry benefits from China's status as a low-cost exporter of processed agricultural products to the world; almost 80% of China's juice production is sold abroad and fruit juice exports showed a strong recovery in March. Although the Coca Cola deal ultimately failed to materialise after Beijing stepped in to stop it going ahead, the longer-term prospects of the fruit juice industry remain attractive.

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