Russia’s Ochakovo ups soft drink bottling capacity as Western rivals leave
2022.08.18 17:02
FILE PHOTO: A view shows a shelf with bottles of soft drinks at a shop in Moscow, Russia August 17, 2022. REUTERS/Staff/File Photo
MOSCOW (Reuters) – Russian drinks producer Ochakovo on Thursday said it had increased the annual bottling capacity of its CoolCola, Fancy and Street soft drinks by 2.5 times to try and plug the gap in the market left by exiting Western brands.
A mass exodus of Western firms due to sanctions and restrictions over Russia’s actions in Ukraine has created an unexpected opportunity for Russian businesses and entrepreneurs.
Although fizzy drinks made by Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP) are still available in Russia, they are set to disappear over time as stocks are run down, leaving local manufacturers to step in.
Ochakovo, which produces beer, juices and carbonated soft drinks similar to Coke, Fanta and Sprite, said it had increased bottling capacity to 125 million decalitres a year from 50 million.
“We have adapted production lines, increased their number, widened production geography and continue to hire staff,” CEO Yuri Antonov said in a statement.
“We are capable of replacing the volumes of brands that have left the market.”
Rival Chernogolovka is aiming for a 50% share of Russia’s nearly $9 billion soft drinks market now that Coca-Cola is reducing operations, its CEO told Reuters this month. The company started making Cola Chernogolovka in May.
Newly launched cola brands, including Ochakovo and Chernogolovka, jumped to a 5% share of sales in the category in the first half of 2022, NielsenIQ Russia said.
Coca-Cola HBC AG, one of Coca-Cola’s many bottlers worldwide, last week said it took a one-time hit of 190 million euros ($193 million) in the first half from costs related to its Russian business after it stopped selling Coke and other products in Russia.
Western companies with iconic brands like Coca-Cola that exit Russia face years of battling knockoffs and unauthorised imports clamouring to fill the void they leave behind, as well as courts with little sympathy for firms that depart.
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