Coca-Cola is encouraged by initial “green shoots” for its ‘One Brand’ strategy, with the fizzy drinks brands stating it has led to retail sales growth as well as boosting the overall brand.
Speaking at Barclays Global Consumer Staples conference yesterday (6 September), Coca-Cola’s president and COO James Quincey told analysts that while it was early days, the outlook is “promising”.
“We’ve launched a new global marketing campaign Taste the Feeling. We believe that marketing takes its time to build up. It is a huge business, and the Coca-Cola business is not going to suddenly change overnight,” he said, according to Seeking Alpha.
“The early signs from the data are starting to look very encouraging, especially in those places where we launched first and we launched the fastest and the hardest. And we see encouraging results in terms of retail sales growth of the Coca-Cola brand in total.
“So green shoots on the ‘Taste the Feeling’ and the One Brand graphical look, which have been launched only in May. It’s a little early to workout what’s happening there, but both of them are looking promising.”
The strategy sees its four variants – Coca-Cola, Diet Coke, Coca-Cola Zero Sugar and Coke Life – placed under one ‘master brand’. Any marketing activity will focus on the overall brand, without creating different personalities for its variants.
During the talk Quincey also discussed the brand’s plans to increase its marketing spend in 2016, but admitted Coca-Cola has become “more cautious” in the way it invests.
“We set out on a programme a few years ago to increase marketing by $800m (£597.6m) to $1bn. We’ve just reached about $700 million. We are being more cautious in the way we invest this year just to make sure it will all pay back.”
Battling falling sales
Despite Quincey’s positive comments, Nielsen figures show that the brand is battling falling sales. Total UK Coca-Cola ‘classic’ value sales for the six months ending 2 July 2016 were down 7.8% to £267.5m. Diet Coke, Coke Zero and Coke Life all saw sales fall by 5.4%, 3.4% and 54.5% respectively. Even though volume sales were not supplied, thereby making it unclear how many promotions were held, the figures clearly show less Coca-Cola is being bought.
And this trend is not only in the UK. At Coca-Cola’s second quarter results in July it was announced global net revenues fell 5% year-on-year. The brand has also downgraded its organic revenue growth prediction for 2016 from between 4% and 5% to 3%.