Coke Pins Hopes on High-Tech Fountain

The soft drink company is rolling out its Freestyle machines to more locations.

May 12, 2010

ATLANTA - Coca-Cola Co. is banking on customers wanting to experiment with its sodas as a way to revitalize its business, the Wall Street Journal reports. Its new Freestyle machine gives consumers the option of mixing 104 different fountain drinks, such as Caffeine-Free Diet Raspberry Coke.

Since 1886, the soda fountain has been one of the cornerstones of Coke??s business, but the technology hasn??t really evolved beyond the 1950s, when nozzles began dispensing the beverages. The Freestyle machine has a curved metal shell created by Ferrari race car designers with a touch-screen menu. Inside, digitally controlled amounts of concentrate flavor from numerous plastic cartridges are released to form the beverage chosen.

Because of the Freestyle??s technology, it costs 30 percent more than a regular fountain, and that has hindered rapid expansion. "Everyone who touches it, everyone who drinks from it and everyone who returns to drink from it tells us they are inspired," said Coke CEO Muhtar Kent, who??s favorite Freestyle choice is Coke Zero with lemon.

With U.S. soft drink volume sales declining since 2005, dropping 2.1 percent last year to 9.42 cases, innovation in this category is sorely needed. Fountain sales comprise a quarter of soda volume and have dipped 2.7 percent, according to Beverage Digest.

Coke currently captures 70 percent of the U.S. fountain market. "If you think about ways to reinvigorate your brands and re-engage consumers, what better place is there [besides a restaurant setting]?" said Gene M. Farrell, vice president in charge of Freestyle.

For the past six months, Coke has conducted tests with 69 Freestyle machines in 53 outlets, such as three Firehouse Subs restaurants in Atlanta. Beverage sales at the Firehouse locations have jumped 13 percent, with overall revenue rising 7.6 percent, said Firehouse CEO Don Fox.

Fox said the Freestyle brings customers back and also entices customers to eat in the restaurant instead of going back to the office. "It adds something to the experience in the restaurant," he said. This summer, 28 more Firehouse restaurants will receive Freestyle machines.

In May, Coke will roll out 500 Freestyles in locations in Atlanta, Dallas, Salt Lake City and Southern California. While only small part of the company??s more than half a million U.S. fountains, Coke wants to take the Freestyle expansion slowly.

Advertisement
Advertisement
Advertisement