Has Coke lost its cool? The beverages giant admits it needs to become more relevant to consumers.
Coca-Cola Amatil, whose business is founded on sales of sugar-laden, fizzy soft drinks, acknowledges it needs to make more products that are better for and more attractive to consumers.
Group managing director Alison Watkins says the beverages market, particularly in Australia and New Zealand, has been evolving over the past five years.
Competition is greater, there are more “value” and private label products, and consumers are shifting towards “better for you” products.
“As a business we have been slow to adapt to these changes in market conditions and shifting consumer trends,” Ms Watkins said on Wednesday as CCA reported a steep fall in profit.
CCA wants to broaden and increase the appeal of its brands to a wider range of consumers, and increase its range of low- and no-calorie offerings.
It will begin the process of making Coke cool again.
The head of CCA’s non-alcoholic beverages business in Australia, Barry O’Connell, said consumers were showing heightened sensitivity towards sugar-based beverages.
They were moving increasingly towards “still” or non-carbonated beverages, such as water, sports and energy drinks.
Greater competition and the consolidation of the retail sector towards bigger grocery outlets was also putting pressure on prices.
Mr O’Connell said CCA intends to introduce a smaller-serve 250ml can of Coca-Cola that sells for $2 in Australia, to address issues of affordability and portion size.
“It will begin the process of making Coke cool again,” Mr O’Connell said.
CCA has also extended its Kirks range of soft drinks to include no artificial colours or flavourings.
The Deep Spring range of mineral water and fruit juice will be made from organic juices.
CCA in June launched its Barista Bros range of flavoured milk.
“This move reflects our decision to focus on a smaller number of high-value potential segments of the beverage market,” Mr O’Connell said.
He said a new pink bottle for the Mount Franklin range of spring water, in support of CCA’s link to the McGrath Foundation for breast cancer, would also help better engage consumers.