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Coca Cola is set to make its appearance on the shelves of Migros, the leading Swiss supermarket chain, writes the retail trade magazine Handelszeitung.

The news, at first sight, is unremarkable... name a supermarket, anywhere in the world, that does not sell Coca Cola, one might say. The fact is, however, that Migros was one of the pioneers in developing "own label" products and only recently has it embarked on a strategy of working with selected major brands.

Will Coca Cola refresh cola sales at Migros?

Younger and faster (?), Pepsi had already teamed up with Migros and appears unphased by recent developments. Coca Cola, on the other hand, is quite clear about what it is doing. "There's no reason for a manufacturer to say no when Migros knocks on your door", Fritz Bärlocher, General Manager of Coca-Cola Beverages tells Handelszeitung.

For the "orange giant", as Migros is known, the situation is equally straightforward. Its new strategy involves inviting selected brand leaders through its doors in all areas in which its own product offer is below strength. That, evidently, is the case in the cola segment, where AC Nielsen, the retail auditor, gives Migros a market share of 20.1% compared to rival Coop's 30.2%. In addition, Handelszeitung says, recent market research showed that the brand Migros clients would most like to see the retailer stock was that of the drinks giant from Atlanta.

The development, says Handelszeitung, is likely to shake up the Swiss cola market. Pepsi has enjoyed brand exclusivity within Migros stores since 2001. Indeed, Pepsi drinks sold by the retailer are produced by Migros' own bottling plant. In recent years, sales of Coca Cola have been rising by only 1% to 3% per year, but the new sales potential unleashed by its agreement with Migros should boost that rate significantly, as previous experience has shown. Kellogg's, for example, enabled Migros to boost cereal sales by 39% and snack sales by 29% when its goods were introduced onto the retailer's shelves.

In a second wave of brand introductions, in May/June 2003, 14 further brands were ushered over the threshold of Migros stores, causing an impressive sales rise of SFr. 33 million over the following 4 months and making Migros the destination for one-third of Swiss households in terms of food shopping and one-fourth in so-called "near food".

Among the "second wave" were such famous names as Nutella, Red Bull, Elmex (toothpaste), L'Oréal, Garnier and Nestlé. The expected arrival of Coca Cola will form part of a fourth wave (a third series of incorporations, to include the Knorr, Nivea and Gillette brands, is currently underway). Despite these new introductions, Migros aims to maintain the high proportion of own-label goods it sells, Handelszeitung says. These currently account for over 90% of turnover. The company hopes to achieve sales of SFr. 300 million from its latest selected newcomers.