Coca Cola ‘s success story in China
In the first half of 2019, Coca-Cola will be the acquisition of the Costa Coffee chain owned by British company Whitbread for $ 5.1 billion. It is clear that the world’s largest producer of soft drinks, founded in 1886, is rapidly evolving into a full-scale beverage company to keep pace with changing consumer tastes.
Coca-Cola established relations with China in 1979, 30 years after the founding of the new China. In the world’s largest market, Coca-Cola has overcome a host of challenges and has retained its world-renowned reputation as China-US relations develop and China’s reform and opening-up are introduced.
Return to mainland China
Coca-Cola entered the Chinese market early, and it was in the 1920s, Shanghai was one of the most famous markets of this famous brand. In 1927, Coca-Cola established a factory in Shanghai. At that time, Watson Water was responsible for bottling drinks. In 1933, just six years after its establishment, Shanghai became the largest filling plant outside the United States. In 1948, Shanghai became the first market outside the United States, with annual sales exceeding one million (24 million bottles). The Coca-Cola poster was located in dance halls and entertainment venues, such as Paramount and Cyrus Plaza in Shanghai at the time.
However, over the next 30 years, for historical reasons, this drink, which has a slightly tasteless taste of traditional Chinese medicine, disappeared on mainland China.
The Third Plenary Session of the 11th CPC Central Committee, held on December 18, 1978, gave priority to economic construction and initiated reform and opening up. That month, there were some other important events as well.
When China and the United States of America concluded the diplomatic relations negotiations held at the Beijing Hotel on December 13, 1978, Coca-Cola was also in talks of cooperation with the largest Chinese food processing, processing and trading group (COFCO) in the same hotel. Three days later, the People’s Republic of China and the United States of America issued a joint statement on the establishment of their diplomatic relations. Mutual recognition and diplomatic relations were officially announced on January 1, 1979. On December 19, Coca-Cola became the first foreign institution Enter the mainland market after applying reform and opening up.
In accordance with the agreement between Coca-Cola and COFCO, the United States of America has adopted a model of commercial compensation or other payment methods for the provision of Coca-Cola bottling and bottling equipment in major cities and regions of China and the establishment of filling stations in China to start sales. Prior to the establishment of the bottling plant in the Coca-Cola branch in China, COFCO completed the product shipment arrangements. The first shipment, consisting of 3,000 Coca-Cola boxes from Hong Kong, was moved to Beijing at the end of 1979, with the assistance of NG Fung Hong.
Choose the factory location
After the return of Coca-Cola to the mainland market, the main task was to choose the factory location. The US side chose Shanghai as a city with a historic link to this American drink. But then, the “leftist” ideology was still in place in China despite the start of reform and opening up. Shanghai had no willingness to host a US factory.
In April 1981, with the support of Lin Hu Jia, secretary of the CPC Committee in Beijing at the time, the packing plant was finally set up in a COFCO building that used a grilled duck factory in Beijing. To ensure water quality, Coca-Cola provided reverse osmosis water purification systems to the Beijing plant, which was the most advanced water treatment system in the world and was only used in a few countries at the time.
Under the cooperation agreement, Coca-Cola installed a fully automatic filling line with a total capacity of 1,200 bottles per minute, equivalent to the advanced level of Western countries at the time, and China spent three hundred thousand dollars a year to buy the Coca-Cola Center. During the installation and testing of the equipment, more than 180 experts and technicians from the Coca-Cola Company arrived in Beijing to help install equipment and train Chinese technicians. Taking into account the efficiency of local staff, Chinese market demands and equipment maintenance and repair needs, the actual production speed was 300 vials per minute in the first phase of the operation. Coca-Cola was expected to invest US $ 600,000, but eventually spent about US $ 1 million to build the plant. The Coca-Cola factory in Beijing has played an ideal role in China’s refreshing beverage industry and has become a destination for leaders of local beverage and pharmaceutical enterprises, who are deeply impressed by its strict quality management. Today, reverse osmosis treatment equipment and production speed of more than 1,000 vials per minute is still the norm in the beverage industry in China.
After a week of trial operation, the production line was officially launched and the first batch of Coca-Cola bottles packed in China was produced. At the time, the New York Times reported that the opening of the Coca-Cola factory in China was accompanied by a ceremonial ceremony filled with songs, music and fireworks in the sky, a more important and noisy celebration than the ceremony of normalization of diplomatic relations between China and the United States of America two years ago From that date. The head of the Coca-Cola Group at the time said China was a great treasure, with many opportunities. Later, the company opened