Carbonated soda market has been in decline for years worldwide. People increasingly want healthier choices. The world is not the same – pouring billions of dollars into advertising a man made, chemical drink is no longer a sustainable strategy. Customers want and deserve better.
Coca Cola, a mega successful, multinational brand known for its iconic drink is the best example of the industry struggles.
Coca Cola is a mainstream drink that was created for the baby boomer generation and went mass market in the 20th century, becoming synonymous with the American Culture. Fast forward to the 21st century, and it’s operating in an increasingly health and environment conscious, more fragmented, less US centred world, where moderate consumption is viewed as a virtue. In this new world, transparency and honesty is key (Coca Cola does not disclose its formula). Corporate responsibility is expected and demanded (plastic bottles are choking the ocean). Authenticity is essential (Coca Cola’s happiness campaigns are akin to McDonalds promoting healthy eating). Being mainstream is not cool.
There, you should see the problem now.
Observing growing health concerns towards the soda drinks industry instantly brings up in my memory Mad Men episodes charting the fall of the tobacco industry. There is no way back I am afraid. For a company like Coca Cola, being so closely associated with the iconic product, that no longer works, is more of a liability than asset.
Marketing machine is also spinning wheels. Millennials and Gen X’ers are not easily sold into pretty pictures. They are not about excess like the baby boomer generation. You have to be lean, humble and honest. You have to have your feet firmly on the ground, speak to an individual, have values and you have to live them. Covering yourself in grass and going green in colour, like Coca Cola is trying with Life, is just not going to cut it. Multiple campaigns promoting happiness are great but ultimately a fake. Coca Cola remains to be the M&S of the drinks world. Old, boring and a bit behind times.
The company is testing new approaches – diversification into new drink categories, packaging, customization, testing natural ingredients, but these attempts are patchy and not enough. It’s easy to compete against formerly prevalent fizzy drinks these days as so many new drinks – health conscious and organic, experimental and fresh, niche and cool, demonstrate.
M&A is another route that Coca Cola management seem to be taking. Coca Cola already invests into emerging drinks brands and start ups. Theoretically it could become the P&G of the drinks world consolidating a successful drinks portfolio under their flagship brand. Is this a sustainable strategy however?
I believe a more radical approach is required. Here are just 3 ideas which could be cornerstones of the transformation plan.
First, Coca Cola needs to appeal to a younger audience, but not only from a ‘marketing’ point of view. In every article I read on Coca Cola I see guys in their 50s outlining strategies for targeting millennials. If Coca Cola want to appeal to and lead in the younger demographic, they need to fully commit to young leadership.
Not just in terms of employees. Customers too. Forget the focus groups, I mean co-creation. Bring in the millennials and let them shape Coca Cola’s future in a hackathon. Throw out the rule book. Forget the word ‘iconic’. Question everything. Give them the power. Let them lead. Then act on what is learnt and created.
Health implications are just one side of the story. Environment impact is another. Coca Cola are one of the largest bottlers in the world but no one is talking about the elephant in the room. Are Coca Cola leading the sustainability efforts in the drinks industry? Are they experimenting with sustainable packaging? Refillables? What is the plan to become 100% sustainable and by when?
They need to go all in. Coca Cola have an opportunity here to lead the industry and form genuine relationships with the consumers who increasingly care about our environmental footprint.
Tech. We are all riding the wave of technological progress. We love our tech. We are hungry for data. We are savvy. Does ‘analogue’ drink really have place in our lives? Tech, smart, science based drinks (packed with nutrients, helping to control appetite, have healthier gut, fill up with antioxidants, etc) are the future.
Give me a sustainable, healthy, enhanced (smart), reasonably priced drink and I am all in. Oh wait. It’s already there. Innocent smoothie it is then.