Blog: Coke must look outside of CSDs
Olly Wehring | 26 June 2006
You don’t get appointed to lead the world’s largest drinks company if you’re not confident that you can take the business forward.
Neville Isdell returned to Coca-Cola Co. two years ago to rescue the US soft drinks giant from declining growth and failed product launches. Isdell has urged company executives to draw up sharper marketing campaigns to revitalise the Coca-Cola brand and to focus more on innovation to reduce dependence on a declining carbonated soft drinks segment.
To some extent, Isdell’s strategy has worked. In April, the company posted a 10% rise in first-quarter profits with non-CSD volumes up 11%. Coke has been far more active on the innovation front, enjoying success with Coke Zero in Australia and, for the first time in the company’s history, testing and launching a new product - Coke Blak - outside the US. And with the launch of media campaigns including “The Coke Side of Life” earlier this year, the company is working hard to re-engage with consumers presented with more and more choice.
But has Isdell’s success caused him to set one target too far? Speaking at the World Food Business Summit in Paris last week, Isdell said the company would aim to double the brand value of Coca-Cola to account for half of the company’s sales by 2015. Growing Coke’s “core” CSD sales was one of “six strategic growth paths” to achieving that aim, Isdell insisted, with “enormous opportunities” in the category - and not just in emerging markets.
However, with consumers turning away from full-calorie, sugary soft drinks in favour of healthier options, Coke is sure to find it tough to drive value from its flagship brand. As the company posted in its most recent figures, volumes in North America, its largest market, were propped up by other brands, including Powerade and Dasani.
Just one indication of the work that needs to be done is the future of its drinks venture with Nestlé. The two companies have been reported to be in talks over the future of the venture, Beverage Partners Worldwide, which markets Nestea iced teas and coffees worldwide. US reports said that Nestea sales had slumped in the first quarter of the year, in stark contrast to a buoyant bottled teas category. Meanwhile, Coke is suffering from falling volumes in key overseas markets like Japan and the Philippines.
The company would be better off giving more attention to the ‘non-Coke’ parts of its portfolio. Health drinks, teas and juices are the growing segments of the soft drinks category and Isdell needs to address these areas if he wants to take the company further.
This weekend sees yet another “International Day” for a drinks category. Lucky us. Anyway, ahead of Sunday’s International Cachaça Day, here’s a wealth of information on Brazil’s national spirit, cour...
In yet one more sign that The Coca-Cola Co is losing its lustre, the soft drinks maker has, for the first time, fallen out of the top ten of a 'world's biggest brands' ranking....
What a week for stats! Yesterday, the Beverage Marketing Corporation released figures to show the bottled water market had more than doubled over the past 15 years in the US....
The Euro 2016 football tournament is almost upon us....
- What Brexit means for drinks industry? - Analysis
- The post-Brexit winners and losers - Analysis
- What does Brexit mean for AB InBev's SAB deal?
- Is there a future for the global beer brand?
- Customisable drinks - The next consumer trend
- The UK Referendum - just-drinks Live Blog
- Ex-William Grant CEO Stella David re-joins Bacardi
- UK spirits producers braced for Brexit impact
- Aldi dealt alcohol sales blow in Australia
- Maxxium eyes US$1.4bn opportunity in UK spirits
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Spirits and Wine: Corporate Overview
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Global RTD insights - market forecasts, product innovation and consumer trends