Comment: Why Coca-Cola is dying

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The love affair is over. After so many hot summer days together, nights out, nights in and cosy Christmases, we’re moving on.
Can we still work things out with Coca-Cola? Or will we be watching the bubbles as it sinks without a trace? Photo / Getty Images
Can we still work things out with Coca-Cola? Or will we be watching the bubbles as it sinks without a trace? Photo / Getty Images

Coca-Cola is dead, and no one is sorry.

The iconic brand has tried everything to keep that fizz going. As it realised people were turning on its signature teeth-rotting drink, it created diet choices.

When the healthy eating movement decided sugarfree sodas were almost as bad, it came up with Coca-Cola Life, made with natural sweetener stevia.

It unveiled new packaging, "unifying" its labelling so that all of its drinks feature a red disc like the original Coke, so fans feel more like they're drinking The Real Thing.

Tragically, what the brand just doesn't understand is that's precisely what we're no longer interested in.

It's not you, Coke, it's us.

While Coca-Cola owns various other brands, it hasn't had large-scale success with products that aren't carbonated drinks. Photo / Getty Images
While Coca-Cola owns various other brands, it hasn't had large-scale success with products that aren't carbonated drinks. Photo / Getty Images



It's gone flat

This week, Coca-Cola's profit slipped in the first quarter as the world's biggest beverage maker was squeezed by weakening foreign currencies and costs around transforming its North American operations.

Worst of all, soda volumes were flat, with its original drink in decline and a lack of consumer demand in Europe and Japan.

Net income for the quarter ending April 1 was $1.9 billion, down 4.8 per cent year-on-year. Revenues fell four per cent to $13.3 billion.

"They're banking growth on third world countries, and that's tragic," Geoff Dart, of retail consultancy firm DGC Advisory, told news.com.au. "When you've exhausted the Western market and you turn to countries like Africa ... There are better choices third world countries could make regarding nutrition. Water would be a far better resource."

With celebrities like chef Jamie Oliver calling for a sugar tax, and anti-sugar campaigners Sarah Wilson (I Quit Sugar) and Damon Gameau (That Sugar Film) speaking out against the sweet stuff, our former favourite needs to wake up and smell the sucrose.

"There's a global movement towards health," said Mr Dart. "McDonald's is struggling as well. It's still associated with hamburgers and greasy food. Coke has been going for 100 years, McDonald's at least 80. It's hard to change consumers' perceptions."

Just as Coca-Cola made that painful discovery with Coke Zero, Diet Coke and Coke Life, there's only so much the fast food chain's gourmet "create your own" range can do to alter that image.

We're not lovin' it.


Stop being you

The way Mr Dart sees it, Coke needs to stop being Coke.

"I don't think the answer is using the Coke brand," he said. "To evolve the brand would be extremely difficult.

"You can't have all your eggs in one basket. Being innovative is not just about having a sub-brand like Diet Coke."

While Coca-Cola owns various other brands, it hasn't had large-scale success with products that aren't carbonated drinks. It could pour far more energy into developing other popular items in the refreshment arena - mineral water, mints, juices.

Alternatively, it could be a brand in its early stages that has already established a consumer following.

"Nestle have done it successfully," said Mr Dart. "They've changed the perception around how healthy they are."

There was no fizz in Coca-Cola Life. Photo / Getty Images
There was no fizz in Coca-Cola Life. Photo / Getty Images



The makeover

With more choices than ever, customers are increasingly discerning about the brands they choose.

The healthy trend has come hand-in-hand with a movement towards boutique, niche products, which give the illusion of being better for you, even if they aren't.

Mr Dart gives the example of beer. While low-carb versions of regular beers haven't been a huge success, craft beers are everywhere.

The same applies to cider. We love to see labels mentioning organic apples — it sounds healthier — and the drink has seen huge growth in China.

"They just need to reinvent themselves and build a strategy around another brand," said Mr Dart. "They need a strategic direction and it needs to happen at board level."

Can we still work things out with Coca-Cola? Or will we be watching the bubbles as it sinks without a trace?

Pepsico have achieved it too, growing into a far bigger brand than Coca-Cola.

Debate on this article is now closed.

- news.com.au

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