Bionade is a German-based privately-owned beverage company that produces and distributes organically manufactured non-alcoholic refreshment drinks (Euromonitor, 2009). The drink is manufactured in the Bavarian town Ostheim and was invented by Dieter Leipol who used a completely organic fermentation process to create it. Bionade, "the world's first non-alcoholic organically produced refreshment drink", is a product that has been marketed as an alternative to alcoholic or soft drinks (Euromonitor, 2009). According to Euromonitor, Bionade has experiences an approximate annual turnover of 70 million EUR. The company, established in 1995, is owned by Rhön Sprudel and after "years of erratic business development", Bionade is operating across all of Germany "enjoying widespread distribution in both the on-trade and off-trade". Between 2002-2003, Bionade experienced a boom but after an "influx of imitations" arising in the market, the company has been forced to compete with "off-brands" with significantly lower prices. As a result, according to Alice Diepenbrock, the Euromonitior Internaional Research Manager (who specializes in the German market), Bionade is "losing it's 'exclusivity'". Along with recent trouble with knock off brands, Bionade has been experiencing difficulty in expanding. Bionade was introduced in France with little success because "consumers preferred the locally produced organic drink instead of foreign versions" (Euromonitor, 2009).
In recent years, Coca-Cola has been dabbling in "minority equity investment in premium soft drink such as the UK's Innocent" which has proven to be profitable (Euro Monitor, 2009). In 2005, Coca-Cola extended an offer to Bionade for acquisition which was later turned down. More recently however, the company has been looking to introduce the drink across the Atlantic. According to the Euromonitior, Bionade has invested 50 million USD to develop a project that would create a production facility in Amana, Iowa and the company has planned to introduce flavors such as cranberry to compliment American taste buds. The location is expected be favorable for the company as the area is concentrated by European descendant. According to Brian Morgan, a senior analyst at Euromonitor International, Bionade could find it beneficial to "link up" with Coca-Cola, as it will "help sales in key regions such as New York, San Francisco and Los Angeles". In addition,given the success of Coca-Cola in the U.S., the company could assist Bionade with "striking distribution deals with individual regional distributors" so that drink ends up on retail shelves. Having a partner such as Coca-Cola could allow Bionade to demonstrate it's "long-term commitment to the U.S. market". Bionade has already been launched in Germany through large American chains such as McDonald's and Starbucks, which could prove to be favorable for them as they bridge into new American market. As a consequence of Bionade's current circumstance, the two companies have revived talks whether Bionade would be willing to give 15-20% of their share to Coca-Cola. If Bionade were to accept, Coca-Cola would then have one executive member sitting on the board.
Past Coca-Cola commercial campaigns
"Coca-Cola currently has no mega brand in the other non-cola carbonates category globally. In the US, for example, the category is dominated by PepsiCo's Mountain Dew and Dr Pepper. Bionade will provide Coca-Cola with a good opportunity to further develop an alternative niche drink and build its credentials as a healthy drinks producer" (Euromonitor, 2009).
"Coca-Cola sets its sights on German organic drink Bionade" :http://www.portal.euromonitor.com.proxy.library.ohiou.edu/Portal/Handlers/accessPDF.ashx?c=63\PDF\&f=F-126203-16285663.pdf&code=%2fJr6wf0IxLOwHzDj%2b3wQXc65NDQ%3d