Coca-Cola is spreading itself outside beverages to expand its market

With 130 years of experience behind the brand Coca-Cola, it would be easy to imagine that the brand would be comfortably reliant on one of its 15 billion-dollar brands that make up the portfolio of one of the largest beverage companies in the world.

However, Coca-Cola has remained an innovative company throughout its history and is now looking to align itself more closely with cultural pillars — sports, gaming and music — by leaping into web3 applications, alternative reality experiences and modern enhanced ingredients.

Coke’s new playbook for innovation coincides with its first global brand refresh in five years, called Real Magic. Not only is the typography of the company’s logo updated, but the established corporation is leaning into disparate segments of popular culture through the development of films featuring well-known gamers and the debut of its Coca-Cola Creations hub.

The Creations platform is the newest innovation station for Coke, and its first release is Starlight, a limited-edition flavour that focuses on embodying the idea of space travel through the use of a cooling sensation in the beverage. The beverage will be available for about six months in North America, Europe and key markets in Asia. By stepping into sensations rather than taste, Coca-Cola is breaking with its innovation tradition of emulating flavours such as cherry and vanilla.

But this is not the only way that the Atlanta-based company has shaken things up recently. Last year, the marketing arm of the company dabbled in NFTs (non-fungible tokens) when it auctioned a 'loot box' of four collectibles through the OpenSea online marketplace. The auction of its first one-of-a-kind digital tokens to exist in the metaverse fetched $575,883.61 (€515430.23), and the sale coincided with an event in Decentraland. However, despite an initial foray into the new digital frontier, Coca-Cola has not since reentered the space.

Killing off no-growth 'zombie' brands

As the beverage segment becomes increasingly segmented by brands offering hyper-specific functional benefits in their drinks, many legacy brands have fallen out of favour with consumers. Coca-Cola responded to the changing headwinds of consumer demand by jettisoning many of its 'zombie' brands such as Odwalla and Zico coconut water. It defines so-called 'zombie brands' as products that have not grown over a three-year period.

Meanwhile, it has been cultivating rising stars like Topo Chico. Topo Chico has been a star brand for the company, not only thanks to the growing popularity of sparkling water but also because the brand marked Coke’s first foray into the alcohol space. Last year, the company partnered with Molson Coors to lunch Topo Chico Hard Seltzer. While initially this partnership with Molson Coors was limited, the American beer brewer announced in September that it would roll the beverage out across the US in 2022.

Like many other major beverage companies, Coke is straddling the line between alcoholic and non-alcoholic beverages. And like many other companies, it has seen success in doing so. Earlier this year, it announced another partnership with the Corona brewer Constellation Brands to produce and distribute ready-to-drink cocktails based on the Fresca soda line. Moving into the alcohol space allows the company to expand the number of occasions at which consumers will reach for its products depending on their need or preference.

Streamlining the supply chain

Outside of innovation within its own portfolio, Coke is also using some of its funds to invest in its supply chain technology. Through its venture capital arm of Coca-Cola Amatil Indonesia, the beverage giant invested an undisclosed sum into Kargo Technologies, an Indonesian startup that digitizes the trucking supply chain.             

It seems as if its strategy is paying off. In the fourth quarter of 2021, the company exceeded expectations, posting net sales figures that were up 10% year-on-year to $9.46 billion (€8.46 billion). According to the company, that means even as beverage trends continue to change, its offerings remain in-demand with over 1.9 billion servings of drinks from Coca-Cola’s portfolio are consumed daily across 200 countries.