Both Coca-Cola and PepsiCo have invested heavily in growing markets, and recent acquisitions have targeted the juice sector as the carbonated beverages market continues to decline. Coca-Cola has acquired Chinese juice company Huiyan for $2.5 billion, while PepsiCo and Pepsi Bottling Group are set to initiate a mandatory offer for the remaining shares of Russian company Lebedyansky. The acquisition does not include the company's baby food and mineral water businesses, which earlier were spun off to shareholders in a separate transaction. Both of the soft drink giants stated that their respective acquisitions had been influenced by the desire to target the growing consumer interest in health and wellness.

Meanwhile, Groupe Danone has said that it is conducting a review of all potential long-term strategic options for subsidiary Frucor, the second largest beverage company in New Zealand. Media speculation concerning an imminent sale of Frucor prompted the statement. Danone bought the company for approximately$150 million and its energy drink, V, is now estimated to be worth $560 million, as it accounts for 60% of the New Zealand energy drinks market. Coca Cola Amatil has shown interest in purchasing V, although competition issues would prevent it from purchasing Frucor outright. Danone has not commented on the possibility of a separate sale of the brand.

Edited by

Adam Smith

IN THIS ISSUE

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Women's Health in Food and Drinks: Future functional ingredients and innovations

This report analyzes the latest clinical research, sales and epidemiological data to
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LATEST COMMENT

Coca-Cola: acquisition of Chinese juice company announced
The Chinese juice company Huiyan will be acquired by Coca-Cola for $2.5 billion. This acquisition will give Coke a stronger footing in the Chinese market, along with adding a perceived healthier sector to its portfolio. The company has completed several acquisitions in recent years and is wisely looking to expand beyond the declining carbonated beverages market. Read full article
Company information: The Coca-Cola Company

Coke Zero: aligning with James Bond
Coke Zero is to be relaunched in limited edition packaging to coincide with the October 2008 theatrical release of the latest James Bond film. The brand has already enjoyed some success in the UK and beyond since its launch in 2006 and this partnership provides an opportunity to appeal to Coke Zero's key customers, although the market for carbonated beverages continues to shrink. Read full article
Company information: The Coca-Cola Company

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RESEARCH IN FOCUS

Understanding Alcoholic Drinking Occasions: The On-Trade

Despite economic uncertainty, consumers' "less but better" attitudes and a desire for indulgence offer marketers opportunities to tap into the on-trade market

Identify the key indicators and the 'who, when and why' of on-trade alcohol consumption

BREWING NEWS

Heineken's H1 net profit up
Brewer Heineken has reported a net profit of E407 million for the first six months ended June 30, 2008, compared to E302 million for the same period in 2007. Read full article
Company information: Heineken N.V.

Coors Brewers to raise beer prices
In an effort to offset the impact of rising input costs, Coors Brewers has increased its beer prices for the second time in 2008. Read full article
Company information: Molson Coors Brewing Company

Brick Brewing to partner with Latis Imports
Brick Brewing has announced that it will be partnering with Latis Imports to launch its specialty craft import portfolio. Read full article

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WINE & SPIRITS NEWS

Diageo's 2008 net sales increase
Drinks company Diageo has reported net sales of GBP8.09 billion for the year ended June 30, 2008, an organic growth of 7% compared to GBP7.48 billion in fiscal 2007. Read full article
Company information: Diageo plc

Brown-Forman's Q1 net income down
Brown-Forman, a producer and marketer of beverage alcohol brands, has reported that net income was $88.2 million for the first quarter ended July 31, 2008, compared to $95.4 million in the first quarter of fiscal 2008, down 8%. Read full article
Company information: Brown-Forman Corporation

Diamond Estates Wines & Spirits acquires De Sousa Wine Cellars
Diamond Estates Wines & Spirits, a wine and spirits distribution and marketing company, has acquired De Sousa Wine Cellars, a family-owned winery. Read full article

Fortune Brands and Pernod Ricard terminate distribution agreement
Fortune Brands and Pernod Ricard have announced an agreement under which Fortune Brands will receive compensation in exchange for an early termination of the company's distribution agreement with Pernod Ricard's Absolut vodka and other brands. Read full article
Company information: Fortune Brands, Inc., Pernod Ricard

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NON-ALCOHOLIC DRINKS NEWS

PepsiCo and Pepsi Bottling acquire majority stake in Lebedyansky
PepsiCo and The Pepsi Bottling Group have completed a joint acquisition of a 75.53% stake in Russian juice company Lebedyansky. Read full article
Company information: PepsiCo, Inc, The Pepsi Bottling Group, Inc

Danone reviews potential long-term strategic options for Frucor
Groupe Danone has said that it is conducting a review of all potential long-term strategic options for subsidiary Frucor, a non-alcoholic drinks company in New Zealand and Australia.
Read full article
Company information: Groupe Danone

Starbucks offers special coffees for Ramadan
Starbucks will be offering its Anniversary Blend and Arabian Mocha Timor coffees to celebrate the holy month of Ramadan. Read full article
Company information: Starbucks Corporation

Crayons launches all-natural sports drinks for children
Beverage company Crayons has launched a line of all-natural and high-fructose corn syrup-free sports drinks to address the nutrition and hydration needs of young athletes. Read full article

Wendy's offers Nestle Nesquik milk and Squeezerz yogurt
Wendy's, a restaurant operating and franchising company, has announced that it is introducing Nestle Nesquik milk and squeezable tubes of strawberry yogurt Squeezerz in its 5,900 US restaurants. Read full article

Jamba reports loss in Q2
Jamba, the parent company of Jamba Juice, has reported a net loss of $89.19 million for the second quarter ended July 15, 2008, compared to a net income of $2.33 million in the same quarter of fiscal 2007. Read full article

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REPORT BESTSELLERS

MARKET TRENDS

Liqueurs and other alcoholic drinks: top flavors in new global product launches
According to the Productscan database, aside from blend, vodka and lemon were the most used flavors in new liqueurs and other alcoholic drinks products launched worldwide between June 2007 and May 2008. Meanwhile, orange dropped to fifth place, and peach, which appeared in fifth place last year, is no longer listed as one of the 10 most used flavors. However, vanilla is a new flavor for the top 10, appearing in sixth place. Read full article

New drinks launches by category, March to May 2008: raising a glass to wine
According to the Productscan database, fruit & fruit flavored drinks, followed by tea and wine & wine coolers, were the leading categories in new beverage products launched worldwide in the three months to May 2008. Compared with the same period of the previous year, the wine & wine coolers category has shown a notable increase, up 87.6%. Other categories to see growth were beer, coffee and energy drinks. Read full article

Product claims: new drinks launches, March to May 2008
According to the Productscan database, upscale, followed by high vitamins and natural, were the leading claims made on new drinks products launched worldwide in the three months to May 2008. While the upscale claim appeared more frequently than in the same period of the previous year, there was a decrease in the number of launches tagged as being pure and natural.
Read full article

Liqueurs and other alcoholic drinks: top flavors in new global product launches
According to the Productscan database, aside from blend, vodka and lemon were the most used flavors in new liqueurs and other alcoholic drinks products launched worldwide between June 2007 and May 2008. Meanwhile, orange dropped to fifth place, and peach, which appeared in fifth place last year, is no longer listed as one of the 10 most used flavors. However, vanilla is a new flavor for the top 10, appearing in sixth place. Read full article

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RELATED REPORTS

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5 Sep
This month's selection of novel food launches from the Productscan database includes a new snack bar that contains an array of healthy ingredients including seed oils, as well as a new type of egg that is said to aid healthy vision.

MarketWatch: Drinks - September 2008
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The Drinks MarketWatch contains the latest news, analysis and opinion, covering all the month's major issues including mergers and acquisitions, marketing and regulatory issues. It covers the period from July 15 August 14 2008.

Consumer Targeting in Food and Drinks: Lifestyle brands, personalized nutrition and customized flavors
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The personalization trend in food and drinks is an expression of the wider societal trend of individualization. A key lifestyle indicator of individualization is the decline in average household size and rise in the number of single person households. In Europe and the US, the proportion of single person households is set to rise significantly in most European countries, especially the UK, suggesting a receptive market for single serve personalized food and drinks products.

Costa Coffee case study: retaining brand leadership in coffee shops
12 Aug
This report on Costa Coffee forms part of Datamonitor's case studies series, which explores business practices across a variety of disciplines and business sectors. It looks at how the coffee company plans to grow further in both the UK and abroad, despite the threat of economic slowdown, by focusing on creating an authentic coffee experience and an ethical business structure.

Ethical and Wellness Food and Drinks for Kids: Key product trends and manufacturer strategies
8 Aug
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Online Grocery Shopping Patterns
7 Aug
The online grocery market is experiencing rapid growth due to growing Internet penetration, entry of new players, and the realization amongst time-pressured consumers of the convenience of online purchasing. Despite this potential, the market is however characterized by challenges including gaining consumer loyalty and trust and the development of compelling, easy-to-use online platforms.

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7 Aug
This report on Twinings forms part of Datamonitor's case studies series, which explores business practices across a variety of disciplines and business sectors. It looks at how the 300 year old company has kept up with changing tastes by embracing health and premiumization trends and diversifying its range.

Women's Health in Food and Drinks: Future functional ingredients and innovations
1 Aug
This report analyzes the latest clinical research, sales and epidemiological data to underpin growth opportunity and potential of healthy food and drinks for women. It considers the latest product developments to determine new areas of innovation and best-practice marketing strategies in the weight control and beauty, menopause and bone health and pregnancy and urogenital trends.

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COMPANY SPOTLIGHT

Wimm-Bill-Dann Foods OJSC

Wimm-Bill-Dann Foods, a Russia-based manufacturer of dairy and juice products, has reported sales of $760.1 million for the second quarter ended June 30, 2008, a 25.6% increase, compared to $605 million in the same period of 2007.

Gross profit for the second quarter stood at $250.9 million, a 23% rise, compared to $203.9 million in the same period of 2007. Net income stood at $36.7 million, compared to $33.7 million in the same quarter of 2007, an 8.8% increase. EBITDA stood at $93.1 million, a 21.2% rise, compared to $76.8 million in the corresponding period of 2007.

For the first six months of 2008, sales were $1.49 billion, an increase of 30%, compared to $1.15 billion in the same period of 2007. Gross profit was $470.4 million, a 24.5% rise, compared to $377.8 million in the corresponding period of 2007.

Net income was $78.6 million, compared to $65.8 million in the first half of 2008, a 19.4% rise. EBITDA stood at $183.8 million, a 24.9% increase, compared to $147.2 million in the same period of 2007.

Tony Maher, Wimm-Bill-Dann's CEO, said that the positive results were pleasing, particularly in the face of an uncertain macroeconomic environment, and the dramatic worldwide increase in food prices.

Key facts

Wimm-Bill-Dann Foods OJSC
16 Yauzsky Boulevard
Moscow
109028
Russia

Tel: 7 95 733 97 26
Fax: 7 95 733 97 25
Web: www.wbd.com

New York Ticker: WBD
No. Employees: 18,322
Financial Year End: December

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SUBSCRIPTION INFO

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