In a wide ranging interview with Reuters in Lagos, the soda giant reaffirmed its plans to acquire the remaining 60% stake in Chi Ltd it doesn’t already own as it seeks to diversify its product offerings from its core sugary drinks.
“We are still on track to complete the acquisition (of Chi Ltd) by the end of the first quarter of 2019,” said Peter Njonjo, president of Coca-Cola’s West Africa business unit.
Coca-Cola acquired a 40% stake in Chi in January 2016, and said at the time, it planned to acquire the remaining 60% within three years subject to regulatory approval.
Juice sales is part of a broader plan by the soft drinks maker to capture bigger market share in Nigeria by offering it at different price points as consumers still face high inflation and modest economic growth in the coming year.
Nigeria’s economic recession officially ended in 2017 but consumer demand still lags its pre-recession peak.
“Affordability will start becoming a bigger issue in this market than it was in the past. As a company, that is what we need to factor in as we are thinking about the future of our business in Nigeria,” Njonjo said.
“We realize that in certain pack formats you can only go down so low. “But once you start looking at pouches and still products, like juice and drinking yoghurts, that allows you to start accessing much lower price points.”
As part of a series of acquisitions the soda giant has made since its new CEO James Quincey took the mantle of leadership in May 2017, Coca-Cola acquired British coffee chain Costa Coffee in August for $5.1bn. The president of the company’s West African business unit said the acquisition could present a “significant opportunity” in Nigeria, despite the country not having a hot-coffee culture.
“There definitely could be opportunity around ready-to-drink coffee here in Nigeria … Having iced coffee, blends of dairy and coffee, packaged in different formats,” he said.
As part of a global commitment it made in January to help collect and recycle its packages, Coca-Cola said it has formalized a Memorandum of Understanding (MoU) with the local unit of French cement giant Lafarge to burn some of its PET bottles in kilns as an energy source.
He also said that the company was working with the Lagos State Government to clean up the state’s waterways of PET debris.