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Thread: Consumers drop softies for coffee - The Advertiser

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    CoffeeSnobs Owner Andy's Avatar
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    Consumers drop softies for coffee - The Advertiser

    Gene Cafe Coffee Roaster $850 - Free Beans Free Freight
    Consumers drop softies for coffee
    By Felicity Williams
    10aug05


    CONSUMERS are shunning soft drinks in favour of healthy alternatives like water or a coffee and beverages giant Coca-Cola Amatil (CCA) is tweaking its strategy to cater for the change.

    CCA (ccl.ASX:Quote,News) managing director Terry Davis said consumer tastes had been changing rapidly over the past five years and would continue to do so.

    "People are drinking water in the morning and want a lift in the afternoon with a Coca-Cola or a coffee," he said.

    "We want to make sure weve got a product that fits a consumption occasion for each part of the day."

    Tastes were changing as Australians chose to eat out more often a trend that was being driven by the rise of the "double-income-no-kids" demographic who favour water, coffee and tea - as well as older "empty nesters".

    Even those consumers who were sticking to soft drinks were increasingly choosing the low-sugar option, Mr Davies said.

    CCA today announced its first foray into cafe society, with the acquisition of Melbourne-based coffee company Grinders.

    The addition of Grinders adds to the diversification of CCAs product portfolio into healthier options, which already includes Mount Franklin water and Fruitopia juices, alongside stalwarts Coke and Diet Coke.

    CCA would increase its range of beverages for the cafe sector and was working on the launch of tea in glass bottles, Mr Davis said. But Coke would continue to be the cornerstone of the companys growth, he said.

    But the bad news is that consumers can expect to pay more for their drinks, healthy ones or otherwise as CCA boosts the prices of its products to keep up with rising costs.

    Higher raw material costs from increases in commodity and fuel prices would result in a five to six per cent increase in cost of drinks sold, the company said. "It is expected that these cost increases will continue to be recovered through increased pricing and other revenue management initiatives," it said.

    CCA posted a 16.8 per cent increase in interim net profit to $145.2 million, on the back of strong sales in Australia. CCA expects to deliver low double-digit net profit growth for the second half of 2005.


    http://www.theadvertiser.news.com.au/common/story_page/0,5936,16213782%255E1702,00.html

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    Re: Consumers drop softies for coffee - The Advert

    As far as healthier drinks alternatives, Id love to see this here in Australia:

    http://www.sobebev.com/product_info/

    As far as coffee drinks from Coca-Cola, Id be a bit skeptical. It is a bit disturbing that theyve already acquired a coffee company. Soon youll probably be able to buy instant espresso in a small glass bottle. When you open the bottle, some sort of chemical reaction takes place, brewing a shot of espresso. To that you add a bit of instant frothed milk from a satchel attached to the bottle. Voila! instant macchiato or something.

    I dont think the coffee industry is in any threat from this corporate heavyweight, but the sheer volume of its coffee enterprise may jack up the price of coffee for us average Joes.

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    CoffeeSnobs Owner Andy's Avatar
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    Re: Consumers drop softies for coffee - The Advert

    I think its intersting on a couple of fronts.

    Firstly, CCA think/know that Coffee is the next big thing. The Aussie Pub culture has been nearly replaced with the Cafe Culture and the can of sticky soft drink has been replaced with a "Latte to go".

    Secondly, without knowing actual figures it appeared to me that Grinders was growing at a fairly fast rate anyway, the seemed to focus on very high traffic sites (eg: the dual petrol station rest area between Geelong and Melbourne) and did a great job of getting their branding EVERYWHERE. Im not sure if the initial business model was to build it for resale but it looks that way now, I hope they did ok.


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    Senior Member robusto's Avatar
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    Re: Consumers drop softies for coffee - The Advert

    Theres a perverse logic in the acquisition: one caffeine seller takes over another, except that the bigger of the two is accustomed to serving it up chilled.



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