News: Coke emphasizing Vitaminwater, “Red-Black-Silver” strategy in 2008


The Coca-Cola Company still believes that carbonated soft drinks are the “lifeblood” of the business, according to remarks made at the Consumer Analyst Group conference in Boca Raton, FL, reported by The Atlanta Journal-Constitution. That said, they will continue emphasis on their non-carbonated offerings as well, primarily led by Glaceau Vitaminwater, which the company purchased in 2007, and will be pushing globally.

The Coca-Cola Company

Unlike PepsiCo, which is a diversified food, snack, and beverage conglomerate, Coke is a pure-play drink outfit, and as such, must creatively market a variety of soft drinks to meet changing customer demands.

Coca-Cola Aluminum Bottles

“Red-Black-Silver” illustrated via test-marketed aluminum bottles
(Source: CNNMoney.com)

The continued success of Coca-Cola Zero, which is in more than 55 markets worldwide, contributes to what Coke is calling a “Red-Black-Silver” strategy for the carbonated soft drink business… “Red” representing Coca-Cola Classic, “Black” as Coke Zero, and “Silver” being played by Diet Coke. Notably absent was any mention of Vault or Coke’s plans to continue their battle against Pepsi’s Mountain Dew franchise.

Powerade Zero will also be introduced, replacing Powerade Option, which itself was created to compete with PepsiCo’s Propel fitness water, the market leader. Zero will be sweetened with a pure combination of sucralose and Ace-K vs. Option’s hybrid approach of using high fructose corn syrup along with those 2 sweeteners.

Coke reiterated projections to grow sales volume by 3 percent to 4 percent and increase earnings per share in the high single digits in 2008.

In 2007, Coca-Cola revenue rose 19.8 percent to $28.9 billion and net income rose 17.7 percent to $5.98 billion compared to the previous year. Coca-Cola earnings in 2006 were brought down by a non-cash charge primarily related to write-downs at Coca-Cola Enterprises, its largest bottler. The Coca-Cola Co. owns about 35 percent of CCE stock.

Three years ago, the company’s earnings growth was slowing and stock price hovering between $40 and $45 a share. It’s now about $57 a share, a marked improvement but still below where it was 10 years ago at more than $80.

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