Danone Invests in China's Growing Fruit Juice Market
Posted on: Monday, 3 July 2006, 12:00 CDT
In a bid to strengthen its position in the Chinese beverage market, Groupe Danone has bought a 22.2% stake in Chinese fruit beverages company China Hui Yuan Juice Holdings.
The French company, famous for it Evian and Volvic brands, says the agreement reflects Groupe Danone's strategy of strengthening its position in the Chinese drinks market where it achieved sales of over 6 billion liters in 2005. Financial details of the deal were not disclosed.
This strategic move could prove highly lucrative for Danone, which recorded sales of over E2.2 billion ($2.81 billion) in Asia last year, as the average annual growth in juice consumption in China for the last 3 years has been over 15%.
There also appears to be scope for further growth as annual juice consumption per capita in China, the world's most populated country, currently stands at less than 2 liters per capita compared with more than 11.5 liters in Hong Kong and Taiwan.
Hui Yuan, which has a strong brand image, is currently the market leader in the juice beverages sector with a nationwide market share of 17% by value. The company also holds a very strong position in the health-oriented juice segments - nectar and pure juice.
Source: Datamonitor
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