Wind-Driven Clouds will likely be in Chinese Fruit Juice Drink Market in the Summer of 2009

On 24th April, China Huiyuan Juice Group Limited and Uni President denied the rumor that Coca Cola continued to contact for purchasing China Huiyuan Juice Group Limited. However, they expressed that they would continue to explore the possible cooperation means, such as OEM.

In the latter half of 2008, since Coca Cola and China Huiyuan Juice Group Limited had reached the merger agreement, two parties began to negotiate the OEM plan, and partial production workshops of China Huiyuan Juice Group Limited had made a full preparation to produce the Munite Maid fruit juice drinks for Coca Cola.

At present, China Huiyuan Juice Group Limited is low in the rate of capacity utilization, which is also the major reason for Huiyuan to consider OEM cooperation. Meanwhile, China Huiyuan Juice Group Limited will turn to produce the low concentration fruit juice drinks and seize the juice market in the summer, which will greatly cut down the idealness ratio of the plant.

Although the acquisition plan of Coca Cola runs aground, China Huiyuan Juice Group Limited will continue to find new strategic partners and now is negotiating the cooperation even joint venture with many companies.

The acquisition plan of Coca Cola with China Huiyuan Juice Group Limited ended up with nothing, however, opened a new pattern in Chinese fruit juice market.

Entering the busy season of the drink sales, Chinese fruit juice drink market is bustling. At first, China Huiyuan Juice Group Limited, engaged in the operation of the high concentration fruit juice drinks, release the low concentration fruit juice drink of Lemon ME, joining in the battle of the lemon drinks between Hangzhou Wahaha Group Co., Ltd and Nongfu Spring Co., Ltd. Soon, Coca Cola also announces to intensify the fruit juice drink business.

The fruit juice business of Uni President was cut down by 7% in 2008 in China. In order to restore the market, the company put the 100% tomato juice. After the various teas placing the leading position for successive years in Chinese market, Uni President will usher a new age of fruit juice in the summer of 2009.

Although Chinese concentrated fruit juice accounts for 50% of the world’s yields, the concentrated fruit juice orders in China were cut down by 70%. In 2008, China exported 692.9 thousand tons of the concentrated fruit juice, down by 33.55% over the previous year.

Chinese fruit juice providers, accounting for over 70% market shares of the world’s concentrated apple juice, are facing with the most serious losses since the beginning of history, in which the export price of the concentrated apple juice is decreased from the peak of 2 thousand USD per ton last year to 800 USD per ton, about 60% of the reduction rate in the price. Andeli Group Co., Ltd, the giant of the apple juice in China, earned 150 million Yuan of net profits, down by 27% year on year and 1.309 billion Yuan of operation revenues, down by 21% year on year, shown in the annual performance report by the end of 2008.   

Andeli Group Co., Ltd and China Haisheng Juice Holdings Co., Ltd etc, the production giants of the export-orientated raw materials, are also eager to transfer their sales to the domestic market so as to rescue the decline in the performance. The sharp drop in the costs of the raw material procurement provides expansion opportunity for the downstream fruit juice processors.

The fruit juice products in Chinese market can be divided into three categories: one is the low concentration fruit juice with the fruit content between 5 to 10 percent, represented by the leading products of O-BOX of Uni President, Daily C of MASTER KONG, Qoo and Minute Maid of Coca Cola; the other is the compound fruit juice made of several kinds of fruits and vegetables with the concentration around 30%, represented by Mr. Juicy in Watson and the Nongfu in Yangshengtang. Another is represented by 100% fruit juice of China Huiyuan Juice Group Limited.

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