Coca-Cola Enterprises (CCE) boss John Brock insists people in the UK think Coca-Cola Life tastes just like standard Coke ahead of its September launch, but is this lack of differentiation necessarily good news?
I’m no fan boy for the industry – as a journalist striving for neutrality I can’t afford to be, and I don’t drink Coke, Pepsi or any other variety of cola. No disrespect to these brands, or the cola taste, which I love.
Last year I decided to cut back on empty calories in my diet, so I imagine I am the kind of lapsed soda drinker that CCE/Coke in Atlanta wants to attract back into the soda category.
What do I drink instead? Teas, tisanes, waters with higher juice content, high-quality juices (carrot, tomato, in particular, in moderation) and sparkling waters. I don’t seem to be cracking open many drinks cans nowadays.
I used to drink smoothies and orange juice – less so now. It’s hard to explain why. Smoothies suddenly seem a bit heavy - I over-indexed on them a few years ago when Innocent was permanently on promotion in the UK – orange juice is a little acidic and nothing new under the sun – an occasionally enjoyable hotel option.
Coca-Cola Life: Pitching to millennials
Forgive this digest of my drinking habits – I won’t divulge my musical or culinary tastes, promise! – but since I’m a millennial consumer (almost 34), I sit slap bang in the middle of a demographic I’d wager CCE fears could desert regular Coke. So this preamble serves by way of explanation for my attitudes towards Coca-Cola Life.
I admit I’d try it, but I certainly won’t be buying it. Coke are cutting one third of the calories by formulating the drink with stevia and ‘real sugar’ (in Brock’s words), and offering it at a similar price to existing UK products, while it will also launch it in Sweden. In time, CCE said last week, it will roll-out the drink across its territories.
The sugar cut is laudable, and no doubt the company would insist that it’s a question of degree. Aside from formulation difficulties with stevia, larger calorie cuts would see consumers ditch Coke in droves. but let’s be honest, this kind of cut doesn’t suddenly turn Coca-Cola Life into a health drink.
It will taste the same or similar, still have around 23g of sugar per 330ml can and phosphoric acid to lend it that distinctive tart taste and preserve the drink. I don't find that particularly exciting. Also, I’m not blaming past Coke consumption here – it's difficult to establish causality - but I just had some pricey dental work done and I’m suddenly very conscious about what I tip down my throat or let near my teeth.
So this is the bottom-line. Coke Life or non-Life…I don’t see a great deal of difference. I’m the health conscious millennial who Indra Nooyi said last week is increasingly drawn to cooking from scratch, using fresh produce – avoiding (not militating against, I respect other people’s choices) packaged foods. I doubt I’m atypical.
I’m no crusty granola hippy, but…
…I want to keep fit and in this respect – to my mind at least – the Coca-Cola Life Life-style is one I’ve left behind. As a millennial I’m less in thrall to big brands that own a narrative and the channels to propound it. I’m keen on new taste trends and more natural soft drinks.
Doubtless Coca-Cola Life will sell well. There’s a novelty value attached to the product and its earth-friendly advertising in Argentina (notice the grass-covered SUV (!) in the Argentina publicity shot crammed with good-looking young people above) that will no doubt carry across here – powered by Coke’s hefty A&M machine. But I wonder if medium-term sales won’t come at the expense of regular Coke?
Discussing the risk the Life could compromise Coke Zero or Diet Coke sales in UK and Sweden, Brock told analysts during CCE’s earnings call last Thursday that Argentina and Chile showed some cannibalization at first.
“But net-net, it will be a positive for our business,” he said. Well, predicting the future is always a little tricky. The jury’s still out on Coca-Cola Life’s long-term success in South America, and if, as Brock says, consumers think it tastes a lot like red Coke, where does this leave Coke’s core brand? Surely as a less healthy equivalent in a different-colored can.
Coke Life might well stem soda sales declines or slowing growth in core markets. Perhaps this is CCE/Coke’s real strategy, it’s hard to see their hand – but will it grow the category incrementally? Perhaps not in the long term.
Why launch in the UK before the US?
Moreover, diets aren’t struggling in the UK to the same degree they are in the US. As yet consumers aren’t shunning drinks with artificial sweeteners, which raises the question, 'Why launch in the UK before the US?’
Caroline Levy, CLSA analyst, even asked Brock this question during last week’s earning’s call, and CCE cited a “joint decision” with the Coca-Cola Company.
“We did the consumer research. It’s gone over extremely well. We’ve introduced it with customers. It’s gone extremely well there. Frankly, they all think it tastes like regular Coke, which is phenomenal. That’s the whole concept.”
But despite slight volume declines in recent quarters for Diet Coke in the UK, Coke Zero volume sales continue to grow strongly, and this drink offers consumers a no-calorie option. So it’s not as if Life will win back the anti-aspartame brigade who might be drawn to the drink in the US, and see red Coke as too sugary.
What do you think of Coca-Cola Life and Coke’s broader strategy surrounding the drink? Drop me a line below!
(29/7/14) Reply to WD: Thanks for your comment. Yes, I guess I am on the edge of the millennial 'tectonic' - interesting discussion here - but the very fluidity of it entails that the category boundaries are not absolute. More to the point, I reckon many Generation Xers in the middle of that demographic might well have views that echo my own.