Coke Mexico in health push amid spiraling diabetes

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Coca-Cola Co. has launched 20 new health drinks in Mexico in what analysts say is an effort to fight rivals—and also to fend off growing medical worries about links between soft drinks and Diabetes.

Doubling the number of brands it sells, Coca-Cola de Mexico this month started to promote milk and fruit-based drinks—and also ones with soluble fiber—in what it said is a bid to become a “total beverage company.”

But analysts said the marketing strategy also aims to fend off growing low-priced soft drink competitors and a Mexican public increasingly looking for healthy beverages rather than traditional high-sugar soft drinks to quench their thirsts.

Mexico is the top per capita consumer of soft drinks in the world, ahead of the United States, and Diabetes has overtaken Heart disease as the number one killer in Latin America’s second most populous country.

”Diabetes is the main cause of death in Mexico and there is an increasing awareness about drinking healthy products,” said Mauricio Brocado, analyst with Actinver brokerage.

“What we are seeing is that they (Coca-Cola) are betting on noncarbonated products that are more healthy, more balanced,” Brocado said. “The flavored water sector has been growing at double-digit rates,” Brocado said.

Around 4 million Mexicans are estimated to have Diabetes, according to the World Health Organization.

DIABETES-SODAS LINK

An eight-year study by the Harvard School of Public Health recently linked frequent consumption of sugar-sweetened beverages to Diabetes in women.

“Those who reported drinking sugar-sweetened sodas more than once per day showed an increased risk for...Diabetes of more than 80 percent compared to women in the study who drank less than one per month,” the Harvard study said.

The World Health Organization reckons the costs of Diabetes in Mexico to be $12 billion per year and rising, as the disease expands. Analysts worry that rising costs associated with Diabetes could prompt public health sector efforts to lower soft drink consumption.

Coca-Cola de Mexico, analysts said, is including health-oriented drinks in its portfolio, such as Ciel Dasani, Minute Maid and Spacio Leve, because of the threat of lower consumption of products like Coke.

“It is diversifying,” said Manuel Jimenez, analyst with Vector brokerage. “There is a large segment of the population that consumes these (health) products and it cannot go against the market tendency.”

Coca-Cola de Mexico spokesmen could not be reached for comment.

Coca-Cola de Mexico says consumption per capita of its products is running at 527 eight-ounce servings per person per year, higher than the average 411 servings in the United States and Canada.

Coke has 13 bottling affiliate companies in Mexico, the largest being Coca-Cola Femsa, the world’s number two Coke bottler and the biggest in Latin America. Known as KOF, Coca-Cola Femsa operates in nine Latin nations. Coca-Cola Co. has a 39.6 percent stake in KOF. 

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