Coca-Cola grows as total beverage company strategy pays off
Coca-Cola’s results were better than expected in the third quarter as net revenues increased 8% year on year to $9.5bn (£7.3bn), driven by innovation in packaging and low- and no-sugar variants.
CEO James Quincey has been on a mission since 2017 to turn Coca-Cola into a total-beverage company – diversifying away from fizzy drinks.
At the crux of this has been marketing, something which Quincy was quick to point out in this week’s call to investors. He said: “You need innovation, you need marketing, you need packaging and you need execution.”
Trademark Coca-Cola has grown retail value by 6% for the year-to-date – a surprise given changing consumer trends away from fizzy drinks. But scratch the surface and Coke has leaned into these trends through innovations such as Coke Energy, Coca-Cola Zero Sugar and optimising packaging.
Quincey noted the brand was attempting to shift consumer perceptions of Coca-Cola to see it as a healthier option. So far it seems it is working.
Junk food ad debate has a new disruptor
The role of junk food advertising in fuelling the UK’s obesity crisis is one of the biggest debates raging right now, and now there is a new voice joining the furore.
Bite Back 2030 is committed to putting young people in the middle of this debate, lamenting the fact it is often a conversation between businesses and governments. The new non-profit group has launched with a campaign video that shows teens discovering the outdoor, social and radio tactics that marketers use.
The organisation aims to halve childhood obesity by 2030 and is targeting the marketing industry to encourage access to healthy food.
Bite Back 2030’s cause is admirable and its youth board, a group of teenage activists campaigning on healthy eating, should be celebrated. But its focus on marketing is short-sighted.
The organisation’s support of the 9pm watershed ignores research that says it would have a limited effect, only removing 1.7 calories per day from children’s diets – the equivalent of half a Smartie a day.
Increasing transparency to ensure parents and young people are making informed choices is a great thing but Bite Back 2030 would do better to focus on packaging of ‘healthy foods’ that contain high sugar. An even better option would be to campaign for government investment in lower socioeconomic areas to improve knowledge and facilities around health and exercise.
Cadbury champions broader ways of working
Whether it is Christmas, Easter or just popping into your local corner shop, nearly everyone in the UK has tried a Cadbury product at some point. However, despite being top of mind, the chocolate giant is recruiting new ways of working in order to stay relevant.
The brand has launched innovations such as Cadbury Dark Milk and 50% less sugar over the last two years, with more products in the pipeline, as well as creating original campaigns such as its Donate Your Words partnership with Age UK.
All of these come from a new way of working that is being pushed from its parent company Mondelēz. Cadbury wants its marketers to get familiar with the “uncomfortable” in order to make braver choices with its marketing.
Cadbury Dairy Milk senior brand manager Claudia Miceli admits that it is “human nature to go for the safe and known option” but that marketers need to go with their gut even if it seems like an out-of-the-box move.
However, Cadbury is not throwing the baby out with the bathwater, with Miceli noting that no matter how bold the campaign, it must always be rooted in brand purpose.
It’s a good move from Cadbury, which needs to keep up with changing consumer trends. As taste palettes become broader and consumer expectations higher, Cadbury cannot rest on its laurels. Smarter, bolder innovation will ensure it is the chocolate of choice for generations to come.
Addressing the plastic problem
There’s no doubting the scale of the plastic waste problem. Environmental pressure group Break Free From Plastic conducted its second annual beach cleanup on 484 beaches in more than 50 countries and found 11,732 pieces of plastic from Coca-Cola alone.
The top 10 list of the biggest culprits reads like a who’s who of big businesses – PepsiCo, Nestle, Mondelēz International, Unilever, Mars, Procter & Gamble, Colgate-Palmolive, Phillip Morris, and Perfetti Van Melle (the company behind Chupa Chups and Mentos).
Many of these companies have turned their attention to the problem. But it’s clear more needs to be done.
Yet Coca-Cola’s CEO is warning that the vitriol against plastic may have swung too far in one direction. He has a vested interest but makes the valid point that plastic is not the only environmental issue at work – so too are carbon emissions and use of other resources.
His solution is to aim towards a circular economy where plastic is used but then recycled into something else. It’s a noble idea, but the fact there were almost 12,000 pieces of Coca-Cola plastic on beaches shows it is far off from being a workable solution.
Is this the end for ‘Get ready for Brexit’?
The UK Government’s ‘Get ready for Brexit’ campaign hasn’t won over many supporters since it went live. A lack of creativity, a crass message and some terrible targeting means it looks like the £100m has largely been wasted informing people they might need an in-date passport.
That’s before we even get into the fact it now looks highly unlikely the UK will actually leave the EU on 31 October, forcing Prime Minister Boris Johnson to give up his ‘do or die’ mantra.
Certainly, the National Audit Office agrees. It believes the campaign may have had “limited impact” despite appearing on TV, in print, on outdoors ads and flashing up almost everywhere online, including across the marketing press where the Advertising Association used money from government to help the industry get Brexit ready.
“However, at this late stage and with ongoing uncertainty about the prospect of no deal on 31 October, this may have limited impact,” the NAO’s report says.
Word now is that the campaign has been quietly binned as the government’s focus shifts to trying to win support for a General Election on 12 October. That will be music to no one’s ears, especially not in ad land where the Christmas quarter is crucial. More uncertainty will likely mean more budgets withheld as business waits to see the outcome of this latest political game.