Coca-Cola is looking to prioritise its Coca-Cola Zero Sugar variant more heavily, as it reveals plans to roll out the product in the US and “keep people within the brand”.
The drinks giant revealed its second quarter results today (26 July), which showed that organic revenues grew by 3%. Its net revenues declined 16%, which the company attributed to its ongoing refranchising programme in the US.
Speaking on the call, the company’s new CEO James Quincey claimed to be happy with Coca-Cola‘s “strong performance” for the quarter. He said this was mainly due to double-digit revenue growth its smoothies brand Innocent in Europe and its “innovation in sparkling soft drinks”, in particular Coca-Cola Zero Sugar.
“[Coca-Cola Zero Sugar has] demonstrated strong consumer appeal in Western Europe, resulting in double-digit global volume growth to date. We will continue to roll it out into new markets, including the US, with substantial media and marketing support. We expect it to become a growing part of our portfolio,” he said.
When asked how sustainable the variant’s growth is, Quincey added that its global growth is “continuing to accelerate and that it still has a long way to go”.
“[The variant] is part of our ‘One Brand’ strategy, which means that it’s an improved version of the Coke Zero formula. But it also comes more in a red visual identity, so it has more of a red label, which helps people stay within the Coke franchise. [We hope] it will help us keep and attract more consumers,” he added.
Coca-Cola is currently in the midst of overhauling its business. Earlier this year, it announced it was axing 1,200 jobs to become a “more agile” company. It also ditched its global CMO role in favour of a “chief growth officer” who will look after marketing, insight and the commercial parts of the business.
Speaking on the call, Quincey once again reiterated that Coca-Cola is changing its culture to become more “growth-orientated” by adopting a “test and learn mentality”. It looks to achieve this by communicating more clearly to its employees why it wants change “instead of asking for it”.
Coca-Cola, he said, needs to have “greater curiosity”, as there is a danger the business will rest on its laurels and fall behind.
“That is the danger of having 130+ years of success. We have the answer to some things but we need to have lots of curiosity to how things can be different and respond to how things are changing. We then need to have the courage to try new things,” he explained.
And while “not all experiments are born equal”, Quincey says there will be “lots of tolerance for doing things in a sensible way”.
He concluded: “The tone needs to be set from the top, we need to put in place training and programmes. If people understand why [we want to change], we can be a much more autonomous company.”