Coca-Cola: We must keep creating brands or online retailers will win

Coca-Cola has put a focus on scaling new brands to drive growth as it looks to innovation and takes a test-and-learn approach to navigate a rapidly-changing market.

Coca-Cola

Creating brands and engendering loyalty among consumers is key to success amid the rise of online retailers such as Amazon, according to one of Coca-Cola’s top marketers.

Speaking exclusively to Marketing Week, Javier Meza, CMO of sparkling at Coca-Cola, says: “The only way to remain in business is creating brands. The moment we stop creating brands then the e-retailers are going to rule.”

He adds: “The moment people stop deciding they want a Coke then Amazon is going to decide the brand they have.”

Meza was speaking on his first day in the CMO role at a press event in Atlanta, US, organised by Coca-Cola earlier this month. He has spent more than 20 years at the company, the last 18 months as vice-president of marketing for Asia Pacific.

He discussed how Coca-Cola is becoming more nimble when it comes to innovation. For example, in Japan the company is launching two products per week, with each launch monitored for six weeks before it decides whether to roll it out more widely or shelve the idea.

The moment the pace of change outside the company is higher than inside, then you start to lose.

Javier Meza, Coca-Cola

Meza explains: “One of the things the Japan business has done is to understand very quickly which products have the chance to be maintained and which have to be removed.”

Faster innovation is one of CEO James Quincey’s key areas of focus as he looks to keep the business on top of new trends and changing consumer demands. That has involved changing the culture of the drinks giant to become more like a startup.

“The moment the pace of change outside the company is higher than inside, then you start to lose,” says Meza.

READ MORE: Coca-Cola puts focus on scaling new brands to drive growth

He adds: “It’s a change of mindset and that’s what James is pushing us to do and I’ve seen more and more of that in Coca-Cola. For example, with the Coca-Cola brand we’ve done Coke with coffee, with ginger and we now have Coke with cinnamon coming in Europe.

“The reason we’ve been able to do that is this notion of ‘it’s OK to try new things’ and if it is not a big success that you don’t have to keep it for years. It’s OK to just learn the marketplace.”

Coca-Cola has committed to diversifying its portfolio to become “a total beverage company” in order to align with consumer trends and move away from its core fizzy drinks business. In its most recent results, organic sales were up 6%, driven by sales of low-sugar drinks such as Coke Zero Sugar and bottled water.

It now divides brands into three categories – leaders, challengers and explorers – with the marketing strategy changing depending on the category.

Meza explains: “Coca-Cola has a leadership position so the marketing model for that brand is not the same as what we want to do with a brand like Powerade because in most markets it is a challenger. And in some categories we are not even a challenger we are just exploring.

“That for me is the biggest change in this growth to becoming a total beverage company, adjusting the marketing models.”

Despite the changes in the marketplace, Meza still believes the job of a marketer is the same: “You need to build brands”.

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Comments
  • Sathish Kumar 30 Nov 2018 at 1:52 pm

    Simply adding too many product variants could strain the entire supply chain as well as increased inventory levels. Instead, they should focus on consumers being able to add these flavors locally, for e.g. by selling them a mixer. It is time to think out of the box.

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