Thursday, October 18, 2012

The Coca-Cola Company (NYSE:KO) all set to Release Beauty Drinks

The Coca-Cola Company(NYSE:KO) and Sanofi SA (ADR)(NYSE:SNY) have collaborated to unveil a series of “beauty drinks” under the Oenobiol Beautific brand in France. Although Coca-Cola did not provide specific details, they did state that the drinks will be available in a "small scale pilot” in a restricted number of pharmacies.

The sudden diversification of products from Coca-Cola, which currently holds the No.1 rank as the world’s largest beverage manufacturer, is not too surprising, because there have been certain issues related to the sugar content in drinks. The company is also trying to expand in Europe where the sales are slightly weak as they have shown a 1% growth in the 3rd quarter. Coca-Cola in France launched Sprite mixed with stevia, a natural sweetener with no calories, some months before. Fanta with stevia was unveiled a couple of years back.

Laboratoire Oenobiol manufactures nutritional supplements for skin and hair care. The company was taken over in 2009 by Sanofi, a Paris-based drug maker. The Wall Street Journal had first reported news of the partnership with Coca-Cola. If the collaboration works out, the four Oenobiol drinks will be manufactured using mineral water, fruit juice and nutrition additives.

The aim behind launching these “beauty drinks” is to promote the idea that drinking these beverages will make skin glow, contribute to loss of weight, strengthen hair and nails, and enhance vitality.

There was trouble in 2009 that led to a lawsuit, involving a similar “weight loss” statement, after Coca-Cola and Nestle launched the green tea drink Enviga, which claimed that the drink would “burn more calories than it contained”. The two companies settled the case with more than 2 dozen states by agreeing to include disclosures to Enviga and products on similar lines that would clearly state the they are not taking credit for weight loss, which can only be achieved via exercise and diet. 

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