Competition
In 1995, Coca-Cola had 32% of the market share of soda sales in Peru while Inca Kola had 32.9%. Since that year, however, the market share for Inca Kola has increased due to some fast food chains including it in their menus. Bembos, a Peruvian fast-food chain, switched from serving Coca-Cola to Inca Kola in 1995. Due to popular demand, McDonald's also began to serve Inca Kola at its locales in Peru in 1995, before Coca-Cola owned the Inca Kola brand (at the time, the only place in the world where Coca-Cola agreed to such an arrangement).
Lindley underwent corporate restructuring in 1997. The expansion resulted in a debt load that took a heavy toll, and Lindley lost almost $5 million in 1999. The company, looking for outside help, turned to the Coca-Cola Co., which acquired half of Inca Kola Perú and one-fifth of Corporación José R. Lindley S.A. for an undisclosed sum believed to have been about $200 million. Johnny Lindley Taboada, a grandson of the founder and chairman of Corporación José R. Lindley S.A., became chairman of the joint venture between Coke and Inca Kola. Coca-Cola became the sole owner of the Inca Kola trademark everywhere outside of Peru whereas inside Peru a joint-venture agreement was forged. To date, Ecuador and the United States (mostly New York and the rest of the Northeast) are two of the countries where Inca Kola is bottled by the Coca-Cola Company.
During the time that the two giants were negotiating, various smaller companies began to emerge in Peru, selling drinks that competed both with Coca-Cola (Peru Cola, Cola Nacional, Inti Cola, Kola Real, etc.) and Inca Kola (Isaac Kola, Triple Kola, Concordia, Oro etc.). Their main point of attack was the fact that Inca Kola was no longer a Peruvian company, having sold out to a foreign company, and therefore not deserving of their money.
During 2004, Corporación José R. Lindley S.A. started talks to buy out Embotelladora Latinoamericana S.A., a bottling business that had been bottling Inca Kola since 1973. They complained that the price of Inca Kola concentrate had increased sixfold since the merger with Coca-Cola. Consequently, they cancelled their contract to bottle Inca Kola in 2000. As a result, in early 2005 Corporación José R. Lindley S.A. purchased two-thirds of Embotelladora Latinoamericana for $215 million. Corporación José R. Lindley S.A. now bottles Inca Kola as well as all the Coca-Cola products using these bottling facilities, with a combined market share of around 60%.
Read more about this topic: Inca Kola
Famous quotes containing the word competition:
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—Kyle D. Pruett (20th century)
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—Mario Puzo (b. 1920)