COMMENT: Coca-Cola - looking for a caffeine hit
Rumours have resurfaced that Coca-Cola might be developing a new incarnation of its flagship brand - a coffee-based soft drink. Coke is currently experiencing poor sales of its new mid-calorie cola, C2, and is launching lemon-flavoured Diet Coke and no-calorie Coca-Cola Zero later this summer.
The company has registered three potential brand names for its coffee offering - Coca-Cola Blak, Makkio and Maquio - for the drink that may be sold in the US and Europe by next year. However it remains unclear whether Coke will approach a coffee-cola launch as purely a flavour development, such as Vanilla Coke, or as an individual product within the booming ready-to-drink (RTD) coffee market.
Coke would be well advised to examine the potential of a fully-fledged RTD coffee product. Cold, portable RTD coffee-based beverages have taken off in the US over the past few years, driven in part by the more general "Starbucks phenomenon". The drinks tend to be marketed in one of two ways, as an indulgence drink or as an energy drink.
PepsiCo and Starbucks' Frappuccino leads the indulgence RTD coffee category. Frappuccinos are marketed on their smooth flavour and are distinguished by their glass bottle packaging. Starbucks' DoubleShot, also produced under the PepsiCo joint venture, leads the energy category of RTD coffee drinks, which are marketed more as a lifestyle brand than a flavourful treat.
If Coke chooses to challenge PepsiCo in either the indulgence or energy RTD coffee category, it would be the first company with a distribution network comparable to PepsiCo to do so. Indeed, Coke does have RTD coffee experience: its Georgia coffee is the category's market leader in Japan, though a previous US trial of an RTD coffee known as Planet Java was curtailed after it failed to meet Coke's financial expectations.
The European and US markets could be ripe for a hefty competitor to PepsiCo/Starbucks. With its extensive distributor resources and Japanese RTD coffee experience, Coca-Cola could yet successfully challenge the Frappuccino/DoubleShot stronghold.
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