Coca-Cola to discontinue its Odwalla brand14 Jul 2020
Coca-Cola is eliminating its Odwalla brand and the refrigerated trucking network that transports these cold fruit beverages. Deliveries of Odwalla will stop at the end of July and unsold inventory will be picked up in August. This move by Coca-Cola will cut 300 jobs.
The 230-truck shipping network that will disappear along with this brand also transports Coca-Cola’s Simply orange juice and Fairlife milk brands. The company said it will find alternative shipping routes for these brands.
Odwalla is one of the largest brands that Coca-Cola has axed from its portfolio to date. This chilled juice brand has been a part of the soda giant since 2001 when it was purchased for $181 million. However, much has changed in this category over the last 19 years. According to Euromonitor International data cited by The Wall Street Journal, this "premium" juice brand has been slipping in popularity, and Odwalla came in as No. 7 in terms of sales for not-from-concentrate juices in U.S. retail stores.
Although the ranking is still in the top 10, a Coca-Cola spokesperson told the Journal, "... we couldn’t make it work, we couldn’t figure out the cost-effectiveness of it." The result is the brand’s discontinuation.
With more than 500 beverage brands in its expansive portfolio, Coca-Cola announced in 2018 that it would pursue a “zombie brand” strategy where it would identify products that have failed to post growth within three years and then rid the parent company of these underperformers. While this approach has been successfully rolled out in the Middle East and North Africa business units with the majority of the 125 underperforming products already eradicated, the Odwalla brand is so far one of the biggest Coke brands to face this fate.
Although Odwalla was marketed as a “premium” juice brand with a healthy sheen to appeal to today’s wellness-seeking customers, the sugar-laden nutrition labels likely contributed to the brand’s struggles. Consumers have been shunning sugar in recent years due to the ingredient’s link to obesity and heart disease. At the same time, Coca-Cola noted that the overall smoothie category has been declining.
This move to shed Odwalla from the Coke family mirrors the approach that many other large CPG conglomerates are taking as they look to streamline their product offerings to save money during the coronavirus pandemic. It would not be surprising if Cocoa-Cola announces an exit strategy for other faltering brands as it works to maximize efficiency and focus its efforts on key brands like Coke, Coke Zero, Simply and Minute Maid.
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