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Mexican Coke bottler gets in shape (sidebar)

Where the markets are

Not surprisingly it is in the mature markets of northern Mexico where the success of the contour Coke has been most pronounced. "Since its introduction a year ago the contour bottle has grown to hold over 14 percent market share in Mexicali. Within two months of the bottle's introduction it was clear we couldn't keep up with demand" says Luis Fernandez. project manager at Mexican Coke bottler Sistema Argos. "We immediately began planning the second contour blow-molding operation in Hermosillo. There the contour bottle took more than 2.5 percent market share in the first month."

While the devaluation of the peso hurts most of Mexico there have been some positive repercussions along the U.S. border towns. The price differential between consumer goods in Mexico and the U.S. encourages Mexicans and U.S. citizens alike to shop on the Mexican side of the border. On an industrial level the wage differential encourages international manufacturers to set up assembly operations along the border. This booming "Maquilladora" industry offers Mexican workers an attractive standard of living with decent spending power. While Sistema Argos sales grew 2% overall this year sales in border towns increased 15%.

A second factor leading to the success of the contour Coke in Mexico is the growing popularity of nonreturnable bottles and the fact that PET is increasingly favored over glass. Although the growth rate of nonreturnables has slowed since January 1995 the mature market in northern Mexico is still growing strong. In Mexicali for example NR bottles currently comprise almost 50% of the soft drink market compared to only 5 to 10% nationwide. NRs in Mexicali continue to grow more than 11% per year.

"We are already thinking about a third blowmolder and will eventually consider operating four blow molders in Hermosillo" envisioned Enrique Montenegro. "We will continue to install label systems from B&H although we may consider more advanced models and optional features as our production needs increase."

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