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How self-serve will drive a sea-change in the soft drinks industry - Comment

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Soft drinks commentator Richard Corbett has seen the future. Again. This time, it happened when he popped out for a burger.

The Coca-Cola Cos latest  version of the Freestyle system was unveiled earlier this year

The Coca-Cola Co's latest version of the Freestyle system was unveiled earlier this year

It was a chance visit to a Burger King last weekend that made me really appreciate that we in the soft drinks arena might be on the brink of a small revolution. Much of the world may not know it yet, but the way consumers are getting their soft drinks in fast-food outlets, theme parks, cinemas and so on is set to change forever in the coming years.

According to research from Globaldata, the fast-food channel globally sells around 30bn litres of soft drinks a year. So, any change in how drinks are served to consumers with their burgers (or chicken, or... well, anything) should be big news for the industry.

The Coca-Cola Co's Freestyle self-dispense system is gaining momentum. The concept is straightforward: Using a touchscreen, the drinker can choose from dozens of different Coca-Cola products. Not only that, but the option is available for the user to customise their own flavour combinations and experiment with new taste creations.

Freestyle has been around for nine years now, but it was only whilst queuing for a Jalepeno BBQ Double XL that I understood just how big an impact the system is likely to have on the on-premise retail environment. The consumers clustered around the machines were enjoying it, one even had an audience as he blended his own refreshment.

It looked like fun.

I spoke to the manager of the restaurant and he confirmed that consumers did indeed enjoy the experience and were far from phased by the technology. They liked that they could refill at leisure and, most of all, they liked the extra choice.

We shouldn't underestimate the appeal to the consumer of extra choice. Traditionally, the cold drinks selection in most fast-food chains would be limited to a fizzy cola, orange, lemon-lime, juice, bottled water or a milkshake. The Freestyle system now delivers a plethora of options. If you're still not happy, then you can create your own.

Feedback was not all positive, With so much technology involved, the likelihood of breakdown is a consideration. The manager admitted this was an issue and that, every two to three weeks, the machine would develop a fault. That would require an engineer from Coca-Cola to be sent to the site - not a quick process.

Granted, my research was limited to a survey of one, but if your machine breaks down that regularly, then you're going to need to have more than one machine to guarantee your customer's supply. This Burger King outlet had to have three to safeguard itself.

A quick online search of how much a machine costs suggests that, in the US, one will set you back US$20,000 or can be leased for $320 per month. To have three machines adds a considerable outlay to the cost and likely a considerable deterrent for smaller on-premise retailers. Over time, however, technical issues become less of a problem and prices normally fall. In the longer-term, then, the expectation would be that the machines become more accessible to a broader audience.

To a larger, high volume on-premise retailer, the financial advantages of the dispense system are easily calculable. If a staff member serves 20 customers per hour and it takes ten seconds to pour a drink, then they can serve at least one more customer an hour if they no longer have to provide the drinks.

That's probably why the Freestyle machine has already been embraced by many of the big fast-food, theme park and cinema operators. Coca-Cola says that there are now 50,000 machines out in the marketplace. Such has been the popularity of the system that, in 2014, PepsiCo unveiled its own version, Pepsi Spire.

Imitation is the sincerest form of flattery. 

There are side effects to the self-serve revolution that are not obvious at first. With consumers able to devise their own flavour combinations, the machine can provide a valuable tool for identifying new flavour trends. Indeed, data sourced and analysed from the Freestyle system prompted the introduction last year of Sprite Cherry and Sprite Zero Cherry in the US.

The Freestyle system could also provide an opportunity to limit the use of packaging. Last year, in the UK, Coca-Cola European Partners joined forces with Reading University to assess the impact on littering on campus if students accessed their drinks from a Freestyle dispenser and not from vending machines and other outlets. If the project can demonstrate green credentials, then Freestyle will be a very attractive selling point, especially in today's consumer climate.

The Freestyle system ticks a lot of boxes and the evidence would suggest that we'll be seeing a lot more of the system in the years ahead. Coca-Cola is backing it with plenty of investment and the new Coca-Cola Freestyle 9100, unveiled in May, will be available in 2019 with even more pioneering features.

Global expansion is inevitable.


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