The Coca-Cola Co's delicate sports sponsorship balancing act - Sustainability Spotlight

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In this month's focus on the sustainability arena, Ben Cooper considers how The Coca-Cola Co's sugar reduction efforts are being perceived by campaigners.

The Coca-Cola Co has come under fire for marketing Coke Classic alongside the brands no-sugar offerings

The Coca-Cola Co has come under fire for marketing Coke Classic alongside the brand's no-sugar offerings

The Coca-Cola Co has made sugar reduction one of its seven sustainability priorities and it was a focus topic, along with water management and waste, at an investor event in London earlier this week. A week or so before, the soft drinks giant had announced it will be the official non-alcoholic beverage sponsor for the UEFA Euro 2020 football tournament, taking place in 12 European cities next year.

In a sustainability context, sugar reduction is about more than lowering a product's sugar content or adding sugar-free variants. It represents a company's acknowledgement of the seriousness of the obesity epidemic; an issue of sufficient consumer concern that failing to respond adequately could imperil the business.

Progress in reducing sugar is a very clear, empirical measure of how a company is responding but it will also be judged on other criteria, including marketing and promotion. At Monday's event, Jon Woods, general manager for Coca-Cola GB, Ireland & Northern Europe, told investors how marketing fits into a five-point plan Coca-Cola GB has used "to navigate our way to reduce sugar levels in the UK".

Diet Coke and Coke Zero now account for 55% of brand Coke's sales in the UK. The sugar-free variants are providing the growth, Woods said, so "we focus the vast bulk of our marketing on to no- and low-calorie products". Coca-Cola Classic and Coca-Cola Zero Sugar are now typically marketed together, he continued, and are viewed as a single brand.

Although not mentioned specifically at this week's event, as part of the marketing mix the contentious issue of sports sponsorship also sits within the sustainability sphere.

In January, the company began a new three-and-a-half-year sponsorship of the Premier League in England and Wales. Reflecting the changing profile of its business, particularly the growth in sugar-free drinks, Coca-Cola is adapting its approach to sponsorship. The Premier League tie-up is the first sports sponsorship for Coca-Cola GB, which it is activating across a portfolio of brands, including Coca-Cola Classic and Coca-Cola Zero Sugar, Diet Coke, Glaceau Smartwater and Fuzetea. The Oasis, Fanta, Sprite, Lilt and Dr Pepper (handled in the UK by Coca-Cola GB) brands will all feature with their zero-sugar variants.

There seems little indication, however, that the change in approach has made the issue of sports sponsorship any less controversial.

While also aiming criticism at UEFA and the Premier League, Barbara Crowther, coordinator of the Children's Food Campaign, castigates Coca-Cola's decision not to reduce the sugar content in Coke Classic and to market full-sugar brands and their sugar-free variants together. "Unlike many other drinks companies, Coca Cola has refused to reformulate its classic Coke brand to reduce sugar in the face of the current obesity crisis, and continues to advertise full-sugar drinks alongside low- or no-sugar variants," Crowther says. "We're very disappointed that UEFA and the Premier League continue to partner with brands like Coca-Cola, rather than working with companies and products that provide actual nutritional value as part of an active and healthy life."

Health campaigners are particularly concerned that sports sponsorships expose children to marketing for junk food and drink and have long advocated a 2100 watershed ban on such advertising, which current regulations do not permit during children's TV programming.

"Regardless of whether it appears alongside a sugar-free version, any advert featuring classic Coke or Fanta is not permitted to be shown in children's media in the UK," Crowther says. "So, at the very least, it should not be permitted to play any part in advertising associated with Euro 2020, especially given the millions of children who are likely to be watching in stadiums and on TV."

Current regulations take no account of the fact that the number of children watching family programming or sports broadcasts will often be far larger than those watching dedicated children's TV. Coca-Cola says it does not market its products to children under 12, adding that the core Premier League audience is over 16.

After many years of lobbying, campaigners finally achieved a breakthrough last year when the Government included a 2100 watershed ban in the second phase of its child obesity plan. This was made subject to a public consultation, which closed in June.

When it comes to making a final decision on the watershed and on proposed restrictions on promotion, the soft drinks and food sectors will be hoping to forestall regulation by showing progress on reformulation and sugar reduction is being made. Coca-Cola says it has reduced the volume of sugar consumed from its products by 26% over the past five years, through reformulation, introducing smaller packs sizes and leading all Coca-Cola brand advertising with Coca-Cola Zero Sugar.

While Crowther is concerned the almost identical look of these two brands and the combined marketing approach militate against uptake of the healthier option, Coca-Cola insists bringing the products together under one brand has been key to consumers switching to Coke Zero. "The decision to bring the variants of Coca-Cola together under one brand is a key part of our strategy to remind people that you can enjoy the great taste of Coca-Cola, with or without sugar, and is designed to encourage more people to try a zero-sugar Coca-Cola," a company spokesperson tells just-drinks. "This strategy is working and Coca-Cola Zero Sugar continues to grow. It is the fastest-growing cola brand in the UK."

Also attending this week's presentation was Coca-Cola chief sustainability officer Bea Perez who conceded Coca-Cola had been "a little bit late" in waking up to the realities regarding sugar reduction. Perez also acknowledged the company may currently be behind some other multinationals with regard to carbon emissions because it has not yet adopted science-based targets.

"We've not moved there yet," she told investors. "We're actually studying and learning, trying to figure out what the implication to our business is and is it right for us to do that."

The objective on Monday was clearly to show investors how valuable and intrinsic sustainability has become to the business. Among a number of definitions, Perez suggested sustainability is "doing more than what's expected of us as a business".

The markedly more-demanding expectations Coca-Cola is now faced with regarding sugar, advertising and promotion are arguably the kind the company may prefer to manage rather than exceed.

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