What began as a syrup produced by a local pharmacist in 1886 is now one of the most popular American soft drinks and the largest non-alcoholic beverage manufacturing and distribution company in the world.
Coca-Cola is known for joining forces with some of the industry's biggest liquor brands, expanding into the canned cocktail business and becoming a more versatile beverage company.
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Because Coca-Cola is such a well-known company, it has chosen established partners who cannot damage its image. These iconic partnerships include its collaborations with Molson Coors (TAP) Topo Chico and Gold Peak, by Pernod Rochard (PDRD) Absolute Vodka, by Constellation Brands (Parking area) Fresca and Brown-Forman's Cocktails (Bachelor of Fine Arts) Jack Daniel´s.
Coca-Cola and Bacardi announce a partnership with a history behind it
On Tuesday, Coca-Cola announced that it has partnered with Cuban rum brand Bacardi to recreate an iconic cocktail that combines both drinks.
While this partnership with Bacardi has only just officially launched, this is not the first time the brands have teamed up.
The relationship between Coca-Cola and Bacardi has a long history dating back to 1900.
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The Cuba Libre, which means “free Cuba” in English, is a popular Cuban cocktail that has combined Coca-Cola and Bacardi for more than 112 years, with a squeeze of lime, of course, as the secret ingredient.
This Cuban drink was born in 1900, shortly after the end of the Spanish-American War, also known as the Cuban War of Independence.
After the end of the war, Americans flew to Cuba and brought this soft drink with them, which soon made it a popular drink among the Cuban community as well.
Coca-Cola designs a lucrative strategy in the canned cocktail market
The ready-made canned cocktail will initially launch in Mexico and select parts of Europe in 2025, with plans to eventually make the drink available worldwide.
Coca-cola (IS) The American soft drink company serves more than 2.2 billion units in more than 200 countries daily, equivalent to 800 billion servings annually.
According to Coca-Cola Second quarter earnings report For 2024, revenue grew 3% globally, with 7% growth in Europe, Middle East and Africa markets and 20% growth in Latin America markets, the strongest growth of all markets compared to the last fiscal year.
Latin America, specifically Mexico and Brazil, is one of Coca-Cola's most profitable markets, with reported 5% growth in unit case volume, despite a 19% price increase caused by inflation.
Not only is Coca-Cola thriving, but also the canned cocktail industry.
According to a IMF StudyThe canned cocktail sector is driving sales in the spirits industry, which is estimated to be worth nearly $19 billion in 2023 and is expected to reach more than $33 billion by 2033.
With a booming Latin American market and a growing canned cocktail industry, launching this partnership in Latin America seems like a no-brainer to generate more profits.
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However, the same is not true for the European market.
Markets in Europe, the Middle East and Africa reported flat unit case volume figures due to a 24% increase in Coca-Cola prices, the highest among all entities, and ongoing global conflicts.
Although this launch seems to make little sense in a market not so strong for Coca-Cola, Europe is one of the largest consumers of alcohol in the world, with more than two thirds of the population that consumes alcohol.
The launch of Coca-Cola's partnership with Bacardi could be a successful strategy, as both continents are important consumers in each market.
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