PepsiCo/Coke Competition Taking Shape

A number of multinational companies are thought to be looking at Myanmar as it continues to show concrete signs of economic reform . After the country spent the best part of half a century in self-imposed isolation, significant political reform has been taking place . From a food and drink perspective, it is unsurprising that PepsiCo and The Coca-Cola Company (Coke) are among those firms looking to capitalise on the country ' s growth potential.

Both drinks firms entered into distributional agreements over the course of 2012, and their sodas are now available in the country. The next course of action is likely to involve establishing local production, which would make their brands much more accessible as well as cheaper , as importing is a much more expensive way of reaching the market. It is worth noting that , until recently, Myanmar was one of only three countries, including Cuba and North Korea, in which Coke did not have a presence.

Rising Incomes To Boost Soft Drinks
Myanmar - GDP Per Capita (US$)

According to Saad Abdul-Latif, the CEO of PepsiCo's Asia, Middle East and Africa unit, the aim is to have an on-the-ground manufacturing presence within the next year. Fundamentally, Myanmar presents some interesting opportunities. A young population of about 48mn, very low per capita soft drinks consumption and plenty of room for the economy to grow over the next few years are all factors that could drive growth in traditional carbonated soft drinks, which typically sell well across the emerging world. While we do not have data on soft drinks sales in Myanmar at this stage, per capita volume sales of commercial carbonated drinks are likely to be very low, certainly below 5 litres.

This article is tagged to:
Sector: Food & Drink
Geography: Myanmar, Cuba, North Korea

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