Pepsi Bid To Spike Dull Japan Sales

PepsiCo Inc on Friday said it would join forces with Japanese beverage firm Suntory Ltd in a bid to boost sales in Japan, where it has lagged arch-rival Coca-Cola Co. PepsiCo said it plans to transfer its Japanese bottling operations to Suntory and will tap the companys nationwide network of vending machines. With Suntorys help, PepsiCo aims to double its share of the Japanese market, chairman Craig Weatherup told a news conference. The objective of doubling volume (of market share) is realistic, Weatherup said. Suntory president Shinichiro Torii added that his company aims for total shipments of 240 million cases of Pepsi and Suntory soft drinks in Japan in 1998, up 30 percent from this year. The companies also said the alliance would triple the number of Japanese vending machines stocked with PepsiCo drinks to 360,000. Vending machines account for more than 40 percent of Japans soft drink sales, the companies said in a statement. PepsiCo is eager to catch up with Coca-Cola, which, holds a 90 percent share of Japans cola market . Reuter and sells its beverages in about 870,000 vending machines nationwide.

 

Suntory, for its part, wants to expand its whiskey and brandy sales by developing new cocktail products that combine its distilled spirits and PepsiCos flagship carbonated beverages, industry sources said.

Torii told the news conference that his company is not yet considering any new products of this type, although the tie-up will strengthen Suntorys soft drink line-up by mixing in such popular PepsiCo brands as Pepsi, 7UP and Mountain Dew.

In 1996, soft drinks accounted for 90 percent of Suntorys food business, which posted total revenues of 190 billion yen, up 7.7 percent from the previous year, and comprised about one-fourth of Suntorys total 1996 sales of 740 billion yen, a Suntory spokeswoman said.

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