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Minute Maid trying to unseat Uni-President

By Tu Lei (China Daily)
Updated: 2009-02-23 08:02

Fang Xuan used to love drinking Uni-President orange juice but these days the 30-year-old editor from International Data Corporation prefers gulping Minute Maid orange juice with pulp.

"It tastes good and its orange pulp is different from other food additives," he said.

Coca-Cola rolled out its Minute Maid juice brand in China in 2005 and its fast growing market share threatens Uni-President, a Taiwan-based firm selling drinks on the mainland, which has dominated the mainland market for years.

Uni-President targets health-conscious shoppers with slogans such as "More Vitamin C, healthier", and its orange juice sells in stores across the country.

Figures from ACNielsen show Uni-President's orange juice was the best-selling fruit juice product for five consecutive years starting when the product was introduced in March 2001.

"I drank Uni-President's orange juice when I was in university," said Liu Ran, a TV program director from CCTV. "It is sweet and I like it."

But Uni-President's orange juice sector is feeling pressure from foreign brands, especially Minute Maid.

In a Carrefour branch in northern Beijing, staff stocked shelves with bottles of Minute Maid, right next to bottles of Uni-President's orange juice.

In 10 minutes shoppers snapped up five 450ML and three 1.25L bottles of Minute Maid. Nobody gave the Uni-President bottles a second glance.

"Normally we sell about 30 boxes of Minute Maid and 10 boxes of Uni-President's orange juice a day," said a Carrefour employee who would not give a name. A 1.25L Minute Maid goes for 5.4 yuan, a 2L Uni-President bottle for 6.2 yuan.

"Minute Maid is our biggest competitor," said Chen Kunjie, Uni-President general manager responsible for the North China market.

"Our performance is not bad," he said, but declined to reveal his company's exact market share.

The Chinese fruit juice market currently has three groups of competitors; Taiwan-based companies such as Uni-President and Master Kong, mainland brands such as Huiyuan and Wahaha and multi-national companies such as Pepsi and Coca-cola, said a Southern Metropolitan Daily report.

A report from a newly-set up fruit juice nutrition and health guidance center said annual consumption per person is less than 1 liter in China, one-tenth of the global average, despite China having an annual national fruit juice producing capacity of nearly 9 million tons.

The Coca-Cola's acquisition of Huiyuan could change the dynamics of China's fruit juice industry.

Coca-Cola will pay $2.4b for Huiyuan, the top Chinese fruit juice maker, which accounts for 42 percent of the market, pending a Ministry of Commerce review.

On Feb 6, 2009 the mainland unit of Uni-President signed an agreement with juice manufacturer Yantai North Andre Juice Co to set up a joint venture. Uni-President also acquired a 10.58 percent stake in Andre Juice for 150 million yuan.

Uni-President isn't just facing off with Minute Maid, Master Kong is also trying to grab more of the mainland fruit juice market. The Master Kong brand is part of Tingyi Holding Corporation, which in turn is part of Ting Hsin International Group.

Master Kong products are China's fourth favorite fruit juices, according to a survey conducted by the Beijing Precision Unite Strategy Corporation, between Dec 18 and 22, 2008 in Beijing. Master Kong juices were rated the best by 10.8 percent of respondents, compared with 26.9 percent who picked Uni-President's juices.

In 2008 Ting Hsin bought back 9.9999 percent of Tingyi Holding's Master Kong Beverages from its Japanese partner AIB and now holds 60 percent of the beverage company's shares. Analysts said the move was a part of a bigger strategy to help Ting Hsin get more market share in the fruit juice industry.

Figures from Tingyi Holding Corporation show beverage sales in the third quarter of 2008 were up 34.02 percent year-on-year to $703.6 million.