The Coca-Cola Company’s two largest franchise bottlers in Japan are making news with a proposed deal to team up to become the world’s third largest Coca-Cola bottler by revenue.
Coca-Cola East Japan Co. Ltd. (CCEJ) and Coca-Cola West Co. Ltd. (CCW) today announced a plan to integrate their businesses to respond to ongoing changes in the highly competitive Japanese market and to better serve 110 million consumers in the country’s most populous regions.
The merger of the companies, which is expected to occur in April 2017 subject to various approvals, marks a major milestone in the evolution of a market that at one time had as many as 17 local bottling companies.
CCW started in Fukuoka more than 55 years ago while CCEJ’s lineage can be traced to Japan’s first bottler, Tokyo Coca-Cola Bottling Co. Ltd., which was formed in 1957. Once CCW and CCEJ combine, five local Japanese bottlers will remain.
During a press conference in Tokyo, Tim Brett, President and Representative Director of Coca-Cola (Japan) Company Ltd. (CCJC), said: “For nearly 60 years, the local Coca-Cola bottling system in Japan has been evolving to meet the unique needs of the Japanese market. Our system’s ability to continuously evolve has ensured its long-term success. The new company being announced today represents the creation of a bottler with the necessary scale and efficiency to react even more quickly to changing customer and consumer needs.”
The new bottler, which will be called Coca-Cola Bottlers Japan Inc., will be headquartered in Tokyo and deliver approximately 86 percent of the volume sold by Coca-Cola in Japan. Based on the combined 2015 results of CCEJ and CCW, it is expected that the new company will generate approximately 1 trillion yen ($10 billion) in annual revenue.
Tamio Yoshimatsu, President and Representative Director of CCW and the nominee to become President of Coca-Cola Bottlers Japan Inc., said: “By combining the valuable know-how and best practices accumulated across decades in each bottler, we will establish our competitive advantage in the market and open up new synergy opportunities, to evolve into a company with excellence -- a company which will continue to provide top notch corporate value to all stakeholders.”
Calin Dragan, President and Representative Director of CCEJ, added, “I am pleased that we have come to this important milestone in our two companies’ transformational journeys. I am confident that the foundation created over the last three years at CCEJ in terms of speed, simplicity and positive change will only accelerate under the leadership of Yoshimatsu-san and in partnership with The Coca-Cola Company as we work to accelerate growth in a dynamic and fast-changing market.”
For years, Japan has been seen as one of Coca-Cola’s most innovative markets with a product portfolio developed exclusively for Japanese tastes. Each year, the Coca-Cola system in Japan launches nearly 100 new products across multiple categories from coffees and teas to juices and sodas.
Japan also has recorded some of The Coca-Cola Company’s strongest growth in recent quarters thanks to continued category innovation with new product launches such as I LOHAS Peach, Fanta Lemon + C and Georgia Cold Brew coffee.
In addition to new products, Coca-Cola continues to innovate with equipment and packaging in Japan, including its innovative “Peak Shift” vending machine launched following the Great East Japan Earthquake in 2011, which saves energy by shifting power used to cool beverages from day (when energy demand is highest) to night, and with light-weight crushable PET bottles originally introduced for the I LOHAS water brand.
Read more about Coca-Cola’s history of innovation in Japan.
See Coca-Cola Japan’s official statement of support for the bottling merger.