NEW YORK – The Coca-Cola
Co. still has faith in the U.S. beverage market and has been changing its
approach on packaging as a way to stay relevant and successful, the Food
Business News reports. Developing new packaging and price points as a way to
meet customer needs has been key to Coke, said J. Alexander Douglas, global
chief customer officer. Douglas addressed analysts at the Goldman Sachs
Consumer Products Symposium this week.
Early in the 21st century,
Coke had only three beverage packages: 12-pack cans, 20-ounce bottles and
2-liter bottles. Now, the company has 1.25-liter bottles and mini cans as well.
“It’s not being done to be complicated,” said Douglas. “It’s being done because
there are specific job descriptions for each of the packages.”
By having a 1.25-liter
bottle, Coke was able to increase the cost of its 2-liter bottles. “(The
1.25-liter price point) works very well when consumers don’t have a lot of
pennies, and that big bottle strategy has worked very well for us,” he said.
“But it’s early stage because the household penetration of the 1.25-liter
bottle is still low, so it takes time to build it.”
Douglas pointed to mini
cans as an instance of how the company’s innovative packaging works. “The
evolution of the U.S. packaging formats reflects a continuous effort to
understand what consumers are looking for and then to be able to deploy it
across retail formats that themselves are focused on specific occasions,” he
said. “And, ultimately, to weave together the execution into an architecture
that makes the brand as big and as valuable as possible.”
Coca-Cola has learned some
lessons from the past. “In the U.S. soft drink business we made that business
weaker as an industry for a number of years because we believed that efficiency
and price were the best way to build the business,” said Douglas. “Certainly,
we want to be efficient, and we can’t be priced out of whack, but we have far
more evidence now that a well-marketed and merchandised soft drink brand will
grow sales and profits than an efficiently produced and distributed one, as
long as you keep the two in balance.”