Coca-Cola Updates: Rolls Out Protein Shakes, Enters Myanmar

June 21st, 2012 by Trefis Team
+7.70%
Upside
60.17
Market
64.80
Trefis
KO: The Coca-Cola Company logo
KO
The Coca-Cola Company

Coca-Cola Co (NYSE:KO) will soon be distributing Core Power, a high protein recovery shake owned by Fair Oaks Farms. The partnership will beef up Core Power’s presence from around 600 stores currently to around 10,000 grocery and convenience stores by this autumn. [1] Besides Core Power, Fair Oaks Farms also offers a wide range of dairy products such as butter, ice cream, cheese and milk.

See our full analysis for Coca-Cola

Gatorade has expanded its portfolio from sports drink to a wide array of products including protein shakes and protein bars aimed to capture the growing sports nutrition industry. Coca-Cola has Powerade but doesn’t have any milk products in its portfolio. So, this move will help Coca-Cola cash in on the growing opportunity as well as slow PepsiCo’s growth in this segment.

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Currently, Coca-Cola doesn’t have a stake in Fair Oaks Farms, but the partnership always opens up the possibility of Coca-Cola owning a minority stake sometime in the future, or forming more alliances with the company to distribute its dairy products. Note that PepsiCo, along with Germany’s Theo Muller, are investing more than $200 million to enter the U.S. dairy product market with plans to launch a yogurt brand this year. [1]

Coca-Cola Expands Presence to Myanmar

While Coca-Cola and PepsiCo are fighting over the dominance of non-soft drink segment domestically, there are other smaller markets where there is scope to expand the traditional soft drinks, for example Myanmar. Until recently, Myanmar was one of the three countries along with North Korea and Cuba that had been barred by the U.S. government from doing business with.

Coca-Cola will import its products from neighboring countries until it sets up its manufacturing and distributional facilities in the country. Coca-Cola’s high brand recognition means Myanmar, with a population of almost 50 million, could be an important market for the soft drink maker in coming years. [2]

We estimate a $76 price for Coca-Cola, which is in line with the current market price.

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Notes:
  1. Coca-Cola to Distribute High-Protein Milk Shake in U.S., wsj.com, June 20, 2012 [↩] [↩]
  2. Coke to enter Myanmar for first time in 60 years, theeconomictimes.com, June 15, 2012 [↩]