World's next top brands set to rise in the east

July 20, 2009 6:09 PM

The world's next Coca-Cola or Starbucks is more likely to emerge from Asia, the Middle East or South AmericaThey comprise Juan Valdez Café, a Colombian coffee chain; Almarai, a Saudi dairy and fruit-juice company based in Riyadh; Patchi, a Lebanese boutique chocolate chain; ChangYu, China's biggest wine producer; and United Spirits, India's largest liquor group, which owns Scotch whisky Whyte and Mackay.
posted by nam3d (35 comments total)

I'm not sure that first link goes where you think it does: I get a teaser about a story about the Kindle and an invitation to register at FT.com
posted by nowonmai at 6:13 PM on July 20

Sorry, I'm half asleep, here's the correct link.
posted by nam3d at 6:25 PM on July 20

Like Sony and Nintendo?
posted by delmoi at 6:33 PM on July 20 [5 favorites]

Or perhaps a merged Kirin and Suntory.
posted by armage at 6:39 PM on July 20

So is this supposed to be bad or...?
posted by dead cousin ted at 6:43 PM on July 20

Hopefully that apple-flavored non-alcoholic budweiser in Saudi Arabia will catch on. Or, less jokingly, Mirinda and Teem in every soda vending machine would make me happy.
posted by empyrean at 6:48 PM on July 20

There are Juan Valdez coffee shops in NYC, they're okay but they have none of the machine/borg efficiency of Starbucks.
posted by kathrineg at 6:55 PM on July 20

Please, let it be Bikkle!!!
posted by snofoam at 6:59 PM on July 20

I like to think that none of these brands will replace Coca-Cola in terms of market domination but rather we'll have a larger number of slightly smaller companies, including smaller Coca-Cola, and more competition.
posted by thirteenkiller at 7:05 PM on July 20

It already happened...Red Bull was based on a Thai beverage and was made popular by and Austrian country.
posted by GavinR at 7:11 PM on July 20 [1 favorite]

Yu Wan Mei Yum-E-Freez Eel Milk. (news report)
posted by ardgedee at 7:24 PM on July 20

One thing that strikes me as staggeringly stupid: shipping beverages from Asia or Europe (or even South America). If anything makes it big on any shores that lie far from it's origin, I hope it can be greatly concentrated or powdered. Shipping single serving packages that contain water as a main ingredient halfway around the world should be made illegal for our own good. Within those restrictions I'd be happy to see some variety.

Yes, I already lump Fiji and Perrier (etc...) water solidly into that category. The energy used in shipping bottled water is crazy, even if tastes good.

Speaking of exotic beverages, did you know that (2007 article) is imported from Asia? At least its concentrated, but that surprised me.
posted by pkingdesign at 7:56 PM on July 20 [2 favorites]

I wonder how many name brands are out-sold by Wal-mart store brands.
posted by XMLicious at 8:29 PM on July 20

The idea that an alcoholic beverage producer might become the next Coke or Starbucks is intriguing. Wouldn't the age restrictions on drinking alcohol in America prevent such products from competing with the American market for soda and coffee? The tween/teen market must be huge for those industries, and I don't foresee much success for whisky companies trying to break into it...
posted by voltairemodern at 8:29 PM on July 20

Don't forget Germany.
posted by romanb at 8:59 PM on July 20

Interesting article from a few years back on the Juan Valdez coffee grower ads, which used to be ominpresent on American TV (prior to the opening of its "upscale" Juan Valdez cafes, which I've never been to) but seem non-existent now.
posted by blucevalo at 9:09 PM on July 20

BTW, it's great to have links to FT articles, but they have a particularly onerous registration wall and I don't think bugmenot etc. works with their stuff.
posted by blucevalo at 9:11 PM on July 20

You know what I always thought was stupid? The idea that because "US Culture" was so popular overseas it somehow translated into some kind of power or something -- basically just power for U.S. stockholders to profit, except people in any countries could buy those stocks just the same.

The fact is, there are more Chinese Restaurants in the U.S. then there are McDonalds, but no one thinks that that translates into any kind of control or power over the U.S. by China.
posted by delmoi at 9:18 PM on July 20 [1 favorite]

^ actually I generally buy into the soft-power thing. It's not that US crap is superior, it's just that we're the melting pot of modernity, the original font of Gross National Cool. GNC is not going to solve sticky problems like the Palestinian dispute of who gets to live where, but it IMO is certainly is a moderating and mediating influence in the background.

The militarists in power in Japan in the mid-late 1930s made a concerted effort to reverse westernization, banning katakana words in usage (like the French effort to keep French French).

Chinese restaurants in the US are really no such thing, just an artifact of Chinese and Korean immigration and small business opportunity.
posted by @troy at 9:52 PM on July 20

Except Changyu wine is garbage. Just awful, not even as good as wines from New Zealand with white labels that say "WINE" on them which sell for $4 at 7-11.
posted by 1adam12 at 9:52 PM on July 20

The fact is, there are more Chinese Restaurants in the U.S. then there are McDonalds, but no one thinks that that translates into any kind of control or power over the U.S. by China.

I agree that there's something interesting to think about here, but you must have realized that your implication is totally absurd. The reasons why McDonalds exerts a certain influence is because their exceedingly homogeneous helps force out local variety and they are, in fact, one giant corporation. The fact that there are tens of thousands of Chinese restaurants around the country isn't very interesting because the majority are either independently owned or local chains. In fact, my friends often joke about how many Chinese restaurants are actually owned by people of Korean or other decent. I don't know to what extent that's true, but it's certainly true that there is no comparable unified corporate hegemony behind US Chinese restaurants.

The largest Chinese food chain I was able to find in a brief search was Panda Express, which only has about 1,230 stores with revenue's over a little over 1 billion USD. McDonalds, on the other hand, has more than 31,000 locations around the world and has revenues of over 22 billion USD.

Interesting exercise, but any claim of control or power over the US by Chinese food restaurants is beyond dumb.
posted by pkingdesign at 9:53 PM on July 20 [1 favorite]

The idea that an alcoholic beverage producer might become the next Coke or Starbucks is intriguing.

I don't think they mean people will start drinking Indian Scotch or Chinese wine on the way to work. They're just using Coke and Starbucks as examples of $InternationalFoodBrand.
posted by clorox at 10:07 PM on July 20

I don't like the Coca-Cola or Starbucks we have now.

look at me, I am a special and unique snowflake.
posted by lekvar at 10:22 PM on July 20

The reasons why McDonalds exerts a certain influence is because their exceedingly homogeneous helps force out local variety and they are, in fact, one giant corporation.

No. McDonald's are franchise restaurants and most are independently owned, rather then being "one giant corporation". They also often localize menus, so you can get beer in German McDonald's and Curry in Indian McDonald's. But that's kind of beside the point. (Starbucks, on the other hand is owned by a single company.)

Interesting exercise, but any claim of control or power over the US by Chinese food restaurants is beyond dumb.

Of course it's dumb, The point is, the original claim, that having a lot of McDonald's around the world somehow gives the U.S. some kind of power is also dumb.

In fact this is literally what I said: "The fact is, there are more Chinese Restaurants in the U.S. then there are McDonalds, but no one thinks that that translates into any kind of control or power over the U.S. by China." so I'm not sure why you would think I said the opposite.
posted by delmoi at 11:49 PM on July 20

The point is, the original claim, that having a lot of McDonald's around the world somehow gives the U.S. some kind of power is also dumb.
delmoi

No one claims that, or at least not in the simplistic way you're putting it. Of course no one thinks that if you build a McDonald's in a place, you get more power there. It's a much broader concept than that.

What you're referring to is the concept of "soft power". The idea is that if another country is listening to your music and watching your movies and eating at your restaurants and drinking your drinks and wearing your clothes and driving your cars, it will make relations easier. It will influence their culture and society in ways that are helpful to you.

So to take your example, while there are Chinese restaurants in the US, US culture is not flooded with Chinese culture. But American culture and media has indeed saturated much of the rest of the world. Much has been written about the impact of this, but it's undeniable. Does this literally translate into a greater ability to control other nations what to do? Not directly, but it may work to influence them.
posted by Sangermaine at 12:03 AM on July 21 [1 favorite]

I don't think there necessarily will be a next Starbucks or Coca-Cola.

Even in the US, the market is fragmenting: PepsiCo diversified heavily (Tropicana, Gatorade, SoBe) and so has Coca-Cola (Minute Maid, Powerade, Glaceau, Odwalla). They have recognised that in a world where culture is diversifying, the unifying brand appeal of a Coke ain't what it used to be.

There is little reason why, internationally, a Chinese, Lebanese or Turkish brand would be able to reverse that trend.

What is true is that the next generation of beverages and likely alcoholic drinks will come out of Asia. Japan, for example, has a less onerous regulatory regime for health-related ingredients (FOSHU) whereas in Europe we have the draconian Article 13.5 (which is seeing product health claims being pulled at great speed) and the US has the FDA.

On top of that, the US just isn't that innovative at the moment in terms of bringing new soft drinks to market. Europe is slightly more ambitious, especially in terms of accepting new formats and flavors. Asia is crazy - and there is huge scope for big, sugar-rich brands to be pared back by healthier alternatives.

But, in the short term, Coca-Cola and PepsiCo will simply try to buy out competitors. Red Bull is an interesting exception because if you ignore its previous life as a service station amphetamine in Thailand, it grew out of Europe, under the radar. It wasn't expected by the major players to be a big trend and by the time Coca-Cola and PepsiCo got interested, the brand had created a whole new category and was big enough to survive on its own.

Coca-Cola and PepsiCo don't intend on making the same mistake twice. I know this partly because they pay me to tell them where the soft drinks market is going. What you will see is the emergence of several strong domestic players in India, China, possibly Brazil. Some will get bought out by Western companies, or enter joint ventures. Some of their product formats will transition across to the west, but probably not in the exact form or under the same name they're marketed as domestically.
posted by MuffinMan at 12:42 AM on July 21 [1 favorite]

just an artifact of Chinese and Korean immigration and small business opportunity.

And deliciousness.
posted by flaterik at 1:00 AM on July 21

So to take your example, while there are Chinese restaurants in the US, US culture is not flooded with Chinese culture. But American culture and media has indeed saturated much of the rest of the world. Much has been written about the impact of this, but it's undeniable.

How is it 'undeniable'?

Here's the thing, it is certainly undeniable that Chinese culinary tradition has had a huge impact on the U.S, but the fact that people eat at Chinese restaurants has zero affect on how people think about the Chinese government. So why would we think that eating at McDonald's or drinking a coke effect people's opinions about their country of origin?

I would agree that American consumer marketing had an effect on communist countries. Advertising for consumer products made people want things that the communist economies couldn't produce, but now that we are out of the cold war, things aren't so simple. It's no longer a zero-sum game between "communism" and "capitalism" where affecting people's desires for consumer goods moves people from one poll to the other.

Now there's a difference between culinary culture and things like movies, which have a lot more impact on how people think. But India and Japan are also cultural centers for most of the world as well (In fact it seems fairly obvious that Japan has had a huge impact on U.S. culture)
posted by delmoi at 1:32 AM on July 21

I'd be happy if Suntori's products replaced everything in the 7-11, myself. They can provide two weeks of Tokyo-Fuel™ in a convenient six-pack.

And Patchi chocolate is gooooooooood.
posted by rokusan at 3:54 AM on July 21

What you will see is the emergence of several strong domestic players in India, China, possibly Brazil. Some will get bought out by Western companies, or enter joint ventures. Some of their product formats will transition across to the west, but probably not in the exact form or under the same name they're marketed as domestically.
posted by MuffinMan at 12:42 AM on July 21

Just my two rupees worth, MuffinMan, I was part of the field promo team from a subset of McCann Erickson that brought Coca Cola back to India in mid nineties (late 94 I dimly recall) and one of the biggest surprises to Coke was the pushback by local domestic colas that that grown up in the years Coke was away (1977 to 1994). Pepsi snuck in using a different strategy (my brother in law was on that team at JWT) and managed to carve a foothold but Coke's rather hamhanded attempts to be the real thing initially led to far more trouble than it was worth for them.

I wonder how much of that was due their unquestioned assumption that they were the 'global soft power' in their category and symbol of mainstream consumer culture, as is being discussed along this conversation thread.

P&G saw a similar situation with Tide/Ariel and Kellogg's cornflakes are still muddling around in hot milk.

this whole issue with emerging market brands has been going on for some time, many of these countries and their respective businesses were/have been under the radar or ignored by MSM, since there's only one dominant logic/culture in the english speaking internet, thus whenever something 'emerges' its always a "surprise"- ooo look, the rise of china, OMG India's elections were a surprise and so on and so forth. it'd be interesting to take a look at how many "local" or "global" brands in the world today are really owned by international firms...
posted by infini at 5:56 AM on July 21 [2 favorites]

The comparison of Americanized "Chinese" food to McDonald's as a source of cultural impact or economic influence seems absurd to me. The so-called Chinese food I can get in the US, assuming I'm not going to a place that advertises as authentic and that I am ordering off the main menu and not a semi-secret "Chinese people" menu, has incredibly little to do with China.

McDonald's, while they have localized campaigns, shares branding materials, a centralized supply chain, and in-house products (packaging, utensils, signage) among their restaurants. American Chinese restaurants might share some common suppliers, but nothing formally centralized. The two largest "Chinese" chains I can think of in the US in different markets are Panda Express and P.F. Chang's, the former being a creation of Andrew and Peggy Cherng of California, and the latter named for a man who opted to supplement his steakhouse chain with some upscale Chinese restaurants (P.F. stands for Paul Fleming).

delmoi, the reason "..the fact that people eat at Chinese restaurants has zero affect on how people think about the Chinese government.." might stem from the fact that Chinese restaurants have very little connection to China, let alone a present-day view of Chinese culture or government. Companies owned and operated within a country, such as Starbucks, may localize their stores and come up with regional variations as they make inroads into a new market but they're very likely packaging up a view of their native culture for export. The way Colombians drink and prepare coffee (I say as I go out on a limb here) might differ from the standard American way that Starbucks has come to represent, and the expansion of the Juan Valdez chain might push some of those differences into the American market.
posted by mikeh at 8:57 AM on July 21

Apologies for the second garbled paragraph, I obviously mangled some phrases in editing.
posted by mikeh at 8:58 AM on July 21

McDonald's, while they have localized campaigns, shares branding materials, a centralized supply chain, and in-house products (packaging, utensils, signage) among their restaurants.

I didn't say they were exactly the same in every respect. What does having a "centralized supply chain, and in-house products (packaging, utensils, signage)" have to do with with the effect on people's attitudes about the origin country?

The way Colombians drink and prepare coffee (I say as I go out on a limb here) might differ from the standard American way that Starbucks has come to represent, and the expansion of the Juan Valdez chain might push some of those differences into the American market.

Uh okay. That's a pretty big limb, and I don't even see what the point is.

People are making the argument that "Eating McDonalds" -> "More likely to support an American agenda" (Where the arrow means 'leads to'). Nothing you said in your comment offers any kind of support for that thesis, you just just pointed out some random differences between McDonalds and Chinese restaurants.

And it's pretty obvious that the proliferation of Chinese restaurants has had "pushed things into the American market". I mean, you can get sweet and sour sauce at McDonald's.

There are two seperate arguments.

1) The effect of the restaurants on local cuisine and what people talk about and think about. I think both McDonald's and Chinese restaurants have that effect.

2) That having restaurants around creates a kind of "soft power" that makes people more disposed towards favoring the source country, and can be used to further the interests of the house country. I don't think that is the case with Chinese restaurants, and so I don't think it's the case with McDonald's in other countries.
posted by delmoi at 9:17 AM on July 21

I think what I was getting at is that corporate chains, instead of crowdsourced trends like common Chinese restaurant recipes and the shared elements of restaurants, are organized forces that are incorporated in one country and may expand to others. I agree completely that "soft power" might not have a political impact and may not shape opinions toward another country as a whole. What I was getting at is that the Chinese restaurant comparison isn't very good.

I think the more interesting point that's getting glossed over in the "my Royal with cheese doesn't make me less of an American-hating Frenchman" soft power sideline here is a fun little quote in the middle of the original article:

"It used to be possible to be a global brand by dominating the US market," said Melanie McShane, a strategist at Wolff Olins. "That's changing rapidly. Now you have to be number one in Asia."

There you have it, for total buying dollars and international influence, the US is now not so relevant.
posted by mikeh at 11:16 AM on July 21

starbucks testing unbranded coffee shops
posted by infini at 12:49 PM on July 21