VietNamNet Bridge – Vietnam has become a key market in Coca-Cola’s and PepsiCo’s business development strategy. Therefore, the two giants have been gearing up their investment to expand their business in the lucrative market.

The drink market has heated up again with the duel of the two hereditary rivals Coca-Cola and PepsiCo.

Coca-Cola has announced that it would pump another 300 million dollars from 2013 to the project in Vietnam, raising its total investment capital in the country to 500 million dollars in 2010-2015.

According to Dan tri, the sum of money would be used to build up infrastructure items, create jobs, develop brands and give support to retail agents.

Four years ago, when Coca-Cola injected 200 million dollars in the Vietnamese market, Muhtar Kent, President and CEO of Coca-Cola stated that Vietnam would be listed among its 25 top markets.

The decision by Coca-Cola has caused a big surprised to the public, because it has repeatedly reported loss in Vietnam. Analysts believe that the new investment package showed the group’s confidence on the long term potentials of the key market, where it has three factories in Hanoi, Da Nang and HCM City.

Meanwhile, PepsiCo, the hereditary rival, has also pumped 500 million dollars to the Vietnamese market, having developed five drink and food factories.

However, just a short time after officially inaugurating the 73 million dollar factory in VSIP industrial zone in Bac Ninh province, PepsiCo announced the sale of 51 percent of stakes in PepsiCo Vietnam to Suntory Holdings Ltd, a Japanese drink and nutritious food group, for 20 billion yen, or 250 million dollars.

Explaining the move, Umran Beba, President of PepsiCo Asia Pacific, said PepsiCo has been focusing on expanding the food and drink trade in Vietnam with the support of Suntory.

With the affair, Suntory would join forces with PepsiCo to develop bottled drink trade in Vietnam with the products bearing Suntory brand, such as tea, soft drink and coffee.

In fact, the cooperation between the two parties has been applied very successfully for the last 30 years already in many markets, including the US, Japan and New Zealand.
As such, the total investment capital Coca-Cola and PepsiCo have poured into Vietnam is nearly the same. Though both of them have been present in Vietnam for 18 years already, they still say that their investment activities are still in the early stage of development, with the main tasks of building factories and developing markets.

Who will be the winner?

On the global playing field Coca-Cola gains the upper hand over PepsiCo. Beverage Digest journal said Coca-Cola holds 52 percent of market share and PepsiCo 21 percent.

In Vietnam, both the brands have been dominating the market, especially in the fizzy drink market segment. According to the Vietnam Association of Brewery, Liquor and Soft Drink, the total turnover of Coca-Cola and PepsiCo in 2010 makes up 80 percent of the Vietnamese drink market, with equal market share for each of them.

Coca-Cola has had 10 brands in Vietnam. Meanwhile, PepsiCo, though having less brands, has also been cementing its firm position on the market with key brands. Especially, it has also been well known for food brands namely snack Poca and Body Naturals soya milk.

The appearance of the Japanese partner has raised a worry that PepsiCo would meet a big challenge, if Suntory resumes the merger and acquisition deal with the Japanese leading Kirin Group, which is also attempting to penetrate the Vietnamese market.

Compiled by C. V