Coke stresses product innovation in diverse Chinese beverage sector

According to Zhang Shoujun, one of the earliest Chinese employees in Coca-Cola's Chinese plant, the caramel-colored cola didn't taste good on first sip.

"It leaves this weird traditional Chinese medicine-like taste in your mouth," Zhang said, "but we figured since it was popular in other parts of the world, it should feel welcome in China."

However, 35 years later, a new breed of savvy Chinese consumers is driving changes in the beverage maker's offerings.

Soda trailed drinking water and juice in market share in China in 2012, according to statistics from China's National Bureau of Statistics.

Meanwhile, the rise of Chinese beverage makers like Wahaha and Jiaduobao has also prompted Coca-Cola and other foreign brands to come up with new products to stay relevant in the increasingly crowded beverage sector.

For nearly a decade, the company has been aggressively marketing a line of juice-based soft drinks sold under its Minute Maid brand. The line was developed in 2005 exclusively for the Chinese market.

Pepsi, another U.S.-based soft drink maker, introduced its Tropicana line to China with similar juice products amid signs over the past decade that competition in the Chinese beverage sector had expanded from traditional segments to a broader range of products, including juice, water, tea and herbal drinks.