Believe it or not, but even Coca Cola, the soft drink mega-giant, has been hit quite hard by the coronavirus pandemic. The company reported a disappointing 33% drop in second-quarter earnings while its global sales plummeted 28% during the lockdown.
In response, it was widely reported this week that Coca Cola is discontinuing yet another drink from its beverage selection. Tab, introduced in 1963 as its first diet soda beverage, then targeted at women as a low-calorie refreshment – is the latest to be terminated.
To help cut costs and ease the strain on supply chains, Coca Cola also plans on dumping other “zombie brands, products, flavors and packaging” that simply aren’t the real money-makers for the brand.
“More than half of Coca-Cola’s 400 brands are ones with ‘little to no scale’ and have sales that represent only 2% of total revenue,” as reported on CNN.
“We’re challenging ourselves to think differently about our brands to accelerate our transformation to a total beverage company,” said Cath Coetzer, the company’s global head of innovation and marketing operations.
“This isn’t about paring down to a specific number of product offerings under our brands. The objective is to drive impact and growth. It’s about continuing to follow the consumer and being very intentional in deciding which of our brands are most deserving of our investments and resources and also taking the tough but important steps to identify those products that are losing relevance and, therefore, should exit the portfolio.”
Coca Cola is also going through some other restructuring to combat the virus’s harmful effects, which includes layoffs and a revamped marketing strategy.
“We are shifting to prioritizing fewer but bigger and stronger brands across various consumer needs,” said James Quincey, Chief Executive Officer at Coca-Cola.
Part of the reason for all this has to do with half of Coca Cola’s sales coming from cinema and movie theatres, which have been closed for the past several months in most countries across the globe.
Still a Cultural Staple
While sales are down, Coca Cola and its main brands are still among the most recognized globally. This status is something the company will have to leverage when it starts climbing back to the black.
Fittingly to its cultural relevancy, the producers of “No Time to Die” poured 8,400 gallons of Coca Cola on Italian street for James Bond. Using it for some positive PR is a smart move.
Though a movie stunt hasn’t quite yet saved Coca Cola, the beverage giant plans to revamp its marketing strategy to ensure high-quality messaging by re-evaluating its investments and digital spending. One way of going about it is to tap into a major, helpful, relevant global trends.
As recently reported on PostFunnel, Coca Cola is working to ensure its entrance to the popular hard seltzer market and the alcoholic beverage business with its new Topo Chico.
Additionally, since the pandemic broke out, Coca Cola launched its first global campaign, The Great Meal, stepping into the food market.
Also, joining other brands we’ve talked about recently, Coca Cola recognizes the human impact of their business and has decided to embrace The Ceres Roadmap 2030.
“Today’s business environment is constantly shifting. To continue to succeed, The Coca-Cola Company must tackle global systemic risks that threaten the health and prosperity of the broader economy and the planet,” said Quincey.
“The Ceres Roadmap 2030 is a bold action plan for companies to grow and strengthen their businesses while taking on critical environmental and social issues.”
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