sip on this

Critics Make a Dent in Coke's Can as Brand Steps Up Health Marketing

Posted by Dale Buss on July 31, 2014 04:04 PM

Things aren't going well for Coca-Cola these days. While the company still returned $47 billion in profits last year, that amount was down by more than $1 billion from 2012.

That may not seem like much of a problem, but as newly chronicled in places ranging from the cover of the new issue of Bloomberg Businessweek to a prominent story in this morning’s Wall Street Journal, minting profits—and sales—for Coca-Cola no longer is as simple as filling another bottle or can. The company and, especially, the brand are being hit with unprecedented resistance these days that is so stiff, some worry it ultimately could be existential for Coca-Cola.

Consumption of soda globally fell in the first quarter for the first time since 1999, though they rebounded in the second quarter; and the consumption slide continues in the US as the brand remains under assault from anti-obesity activists and politicians for its sugar and calorie content, while Diet Coke increasingly is suffering attrition as well because of concerns about aspartame. Meanwhile, new beverage startups in the flavored water and tea categories in which Coke has invested aren’t growing quickly enough to offset the continued losses in soda consumption.Continue reading...

chew on this

CPG Brands Whack Calories, But Some Critics Won't Give Them Their Due

Posted by Dale Buss on January 9, 2014 02:58 PM

Apparently you're damned if you do, and you're damned if you don't—at least if you're a consumer packaged goods company. That's one of the big lessons of the reaction to this week's announcement that CPG companies have more than quadrupled the goal in their pledge to reduce the total calories contained in their products over the last five years.

Critics quickly wondered whether the companies should be getting credit, or just American consumers who've been making "better" eating choices. But more on that later.

The total calories in products sold by 16 of the nation's largest food and beverage companies—ranging from Coca-Cola to PepsiCo, General Miils to Kellogg, Kraft to Nestle —dropped by 6.4 trillion from 2007 through 2012, according to an independent evaluation funded by the Robert Wood Johnson Foundation.Continue reading...

sip on this

Sliding Coca-Cola Sales Apparently Cost Job of Coke's Americas Chief

Posted by Dale Buss on December 13, 2013 03:49 PM

Steve Cahillane has been sidelined in the horserace to succeed Coca-Cola CEO Muhtar Kent, with the president of Coca-Cola Americas leaving the company as Coke restructures management yet again. It appears that slowing soda sales in the US nixed Cahillane's chances for the company's top job.

It was just a year ago that Coke streamlined its management to set up an apparent contest between Cahillane and the new head of the rest of the world, Ahmet Bozer, to succeed Kent someday; he's been CEO since 2008. Bozer now has been installed as a clear No. 2 to Kent, according to the Wall Street Journal.

In its moves this week, Coke also said that it would divide North American duties into a job overseeing corporate North American operations that will be occupied by Sandy Douglas, who will also continue as global chief customer officer, and a North American bottling portion that will be overseen by Paul Mulligan, who had been in charge of bottling investments in Japan and Latin America.Continue reading...

brand challenges

As Its Woes Pile Up, It's Worth Asking: Has McDonald's Jumped the Shark?

Posted by Dale Buss on October 17, 2013 01:58 PM

Is it possible that McDonald's finally has jumped the shark? Its faltering performance has put the iconic chain in the crosshairs of securities analysts and investors lately, and even some of its own franchisees, as well as the predictable coterie of nutrition critics and low-wage-worker advocates.

"I think McDonald's has reached its apex,"said a franchisee in a new Janney Capital Markets survey of 29 McDonald's franchisees. Is he right?

Clearly the world's leading fast-feeder has been struggling for a couple of years under the leadership of CEO Don Thompson, who succeeded a very good run by the initially underestimated former CEO Jim Skinner. Same-store sales in the US and some other markets are barely staying above year-ago comparisons. And while new menu items proliferate, most of them have been for only a "limited time—such as the new Southwest Chicken Premium McWrap—and they tend to slow service.Continue reading...

sip on this

Coca-Cola CEO Muhtar Kent Steers Ship Through Positive Third Quarter

Posted by Dale Buss on October 16, 2013 10:53 AM

Buffeted by what CEO Muhtar Kent called "headwinds" and aided by "tailwinds" around the world, Coca-Cola reported a good but not great third quarter and vowed once again to meet its target of doubling 2010 revenues by 2020.

Meanwhile, PepsiCo today reported a 1.5 percent revenue increase for the period while US beverage sales slid by 2 percent.

While much of the attention to the Coke brand these days is how marketers wrangle with the obesity issue, sales of the globe's leading soft-drink brand still grew 2 percent by volume during the period. About 70 percent of the company's sales are soft drinks.

Overall sales volumes including non-soda drinks such as teas and bottled waters grew by 2 percent in the United States. But it was emerging economies that gave Coca-Cola enough momentum to post a 4 percent rise in earnings per share for the period, in line with analysts' expectations.Continue reading...

sip on this

Sprite Hopes to Spread Holiday Cheer with Limited-Time Cranberry Flavor

Posted by Alicia Ciccone on October 10, 2013 07:42 PM

Sprite is hoping to sweeten up the holidays with a new limited-time, cranberry-flavored version of the popular lemon-lime soft drink. 

In its first flavor innovation since it debuted Sprite Remix in 2005, the new flavor will contribute a kick of sweet and tart cranberry in regular and Sprite Zero forms. Available from mid-October through the New Year, the new beverage might lend itself well to holiday-themed drinks and even as a flavored mixer for alcoholic concoctions. 

The innovation comes as major soft-drink manufacturers Coca-Cola and Pepsi are feeling the squeeze of more health-conscious customers, with soda consumption volumes falling. Coke has tried to quell calorie concerns with widespread anti-obesity campaigns and the expansion of its "Zero" calorie-free line to more of its brands.Continue reading...

brand challenges

McDonald's Promotes Reading, Healthy Eating with Happy Meal Books—But Is It Enough?

Posted by Dale Buss on October 10, 2013 04:27 PM

McDonald's certainly can't win with some critics. Its new promotion involves giving away millions of books that will advance both children's literacy and their understanding of healthy eating. But all some people see are a cynical way to sell more fast food.

Which, of course, is what McDonald's is in business to do. It'd be tough to make a mass business, employ all those workers and pay all those taxes with a trade that offered only, say, hand-made artisan sandwiches of artichokes and avocados with a chaser of kombucha.

In lieu of toys, McDonald's US plans to distribute more than 20 million paperback books inside its Happy Meals in the US during the first half of November, a gambit which could make it the country's "largest children's book publisher for the month," as Ad Age observed.

The move is "yet another effort to appease criticis who have lambasted its Happy Meals for the food quality, the licensed toys and kid-targeted marketing," noted USA Today. The brand launched a similar effort back in the UK back in January, where it received much the same criticism.Continue reading...

corporate citizenship

Coke Combats Sustainability and Nutrition Critics with Rural Ekocenters

Posted by Adeline Chong on October 8, 2013 06:36 PM

Imagine a shipping container painted bright red, with a solar panel on its roof, in the middle of a rural road. The red is a familiar one. It is the famed Pantone hue that accompanies Coca-Cola cans around the world. And suddenly, that bright red block on the side of the road doesn't look so out of place.

Coca-Cola has just opened its first Ekocenter kiosk in Heidelberg, South Africa. The makeshift refreshment centers are in fact revolutionary water distillery systems designed by Segway inventor Dean Kamen, and are capable of providing up to 850 liters of clean drinking water per day. In communities which lack access to drinking water, the Ekocenter will appear on the horizon like a mirage in a desert, except that it is very real. Coca-Cola said that one more Ekocenter will open in another location this year. 

The plan is to have 150 Ekocenters in remote areas in 20 countries in Africa, Asia, Latin America and North America by the end of 2015, with a pledge to give back the amount of water used in its products by 2020, which is a lot, since the company used 156 billion liters of water in its finished products in 2012 alone.Continue reading...

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