How Coca-Cola creates billion dollar brands

These brands – which pull in at least a billion dollars annually in revenue sales – are everyday staples for millions of consumers the world over.

Mango drink Maaza has just become Coca-Cola’s 30th billion dollar brand. As the company reaches this impressive milestone, we look at how it’s built up its power stable; what categories the most exciting brands are in; and how the company spots a potential winner and powers it to global success...

‘It all started with one...’

The company dates back to 1886 in downtown Atlanta, where the first glass of Coca-Cola was poured.

Today, more than 2.2 billion servings of The Coca-Cola Company’s drinks are enjoyed every day in more than 200 countries and territories across the world.

It all started with Coca-Cola: the company’s original billion dollar brand.

But the company is constantly shifting and transforming its portfolio: not only continuing to successfully produce and market its classic sodas, but also looking at newer options such as ice tea, bottled water, fruit juice and even vitamin fortified drinks.

Now, its billion-dollar brands include Diet Coke, Coca-Cola Zero, Topo Chico, Minute Maid, Smartwater, Bodyarmor, Fuze Tea and Fairlife.

But here’s a surprising fact. Out of Coca-Cola’s current 30 billion-dollar brands, only three were acquired as ready-made billion dollar makers. A further 12 brands were acquired as smaller propositions, which Coca-Cola then built up to billion-dollar status.

But half of Coca-Cola’s billion dollar brands have been developed in-house.

“I think [this] is super important to pay attention to, because [in] that portfolio of 30 billion dollar brands since the creation of Coca-Cola, we have created 15 billion dollar brands organically ourselves from inception to the $1 billion of retail revenues, all being done organically from within The Coca-Cola Company,” said James Quincey, CEO, speaking at CAGNY recently.

“Of the ones that we have created through an M&A platform, 12 were bought very small and turned into billion dollar brands and only three were bought as they are, as billion dollar brands.

“And I think that talks to the fact that the system has an incredible way of being able to both leverage consumer insights organically and to execute on what is largely a bolt-on M&A strategy that delivers value through scaling around the world.”

What Coca-Cola does and doesn’t do to grow its brands

Of course, Coca-Cola’s might and muscle gives it a head start in brand building.

But the first myth to get out of the way is the idea that a sprinkling of Coca-Cola magic equals instant success for any brand it decides to put its might behind.

In fact, Coca-Cola’s biggest brands have been built up over decades.

“That massive portfolio of 30 billion dollar brands was, of course, not an overnight success,” said Quincey. “The slightly ironic part of calling this industry the fast-moving consumer goods industry is, of course, it may rotate quickly on the shelf from where it gets its name, but the structure of the industry actually does not change quickly. The creation of beverage brands is an incredibly long run process.

“We’ve been driving Sprite and Fanta for many, many, many, many years since their inception, and yet now they’ve achieved some absolute scale. If you were to take Sprite and Fanta together, they would be the fourth largest NARTD company. And among the top 10 brands in CPG. And yet we’re still getting started.

“If you compare the market share of our flavor brands to the market share of Coca-Cola within the cola category, of course there is still a long way to go. So even though they’ve been around for many, many decades, they still have a huge opportunity ahead of them in the flavor category.

“For example, Simply has become the number one juice brand in the US at the end of last year, but that has been several decades in the making.”

Another stills category that doesn’t always get a lot of attention - but where Coca-Cola is steadily building up - is ready-to-drink tea.

“Ready-to-drink tea was actually the fastest growing category in the industry and Fuze Tea was growing at three times the industry,” said Quincey. “So not only have we seen the investments behind some of these stills categories start to drive considerable growth, but we have been able to grow much more rapidly than the category.”

Another success story that has been built up over the last decade is ultra-filtered milk Fairlife. The brand was launched in 2012 via a partnership between Select Milk and The Coca-Cola Company, launching onto shelves in 2014. Coca-Cola then took full ownership of the company in 2020.

“In 2014, the retail value of Fairlife was $10 million,” said Quincey. “Last year it was nearly $4 billion. And of course, it’s a compounding business. It still looks small five years into that journey. But eventually, if you’ve got the consumer proposition exactly right, that compounding will turn into a huge and profitable business, which is Fairlife.”

The last decade: the shift to a total beverage company

Coca-Cola is the top consumer brand in the world. And the brand saw an incredible $60bn in retail value growth from 2014-2024.

But Fairlife’s growth in this time period also illustrates how the company is shifting its focus to a ‘total beverage company’ - one with many different beverages for all occasions.

With brands such as Dasani, Ciel, Smartwater and Topo Chico, it’s the top global player in bottled water.

Powerade, Bodyarmor and Aquarius make it the top international sports drinks player.

It’s also the top global player in juice: with brands such as Simply, Maaza, Minute Maid and Del Valle.

And up-and-coming categories include iced team (5% category volume growth in 2024) and milk drinks Fairlife and Core Power.

Once these power brands have been established, this then gives Coca-Cola the opportunity to use their might and scale to launch into new, trending categories with a bang. Take, for example, last month’s launch of its first-ever prebiotic soda - which hopes to take a significant slice of the booming gut health category - which has been launched under the billion dollar Simply brand.

Killing the zombies

Another myth is that everything Coca-Cola touches is a success.

But Quincey points to the company’s COVID strategy: where it slashed the number of brands from more than 400 to 200, deciding to focus its efforts on its strongest brands.

Dubbed by Quincey as the company’s ‘zombies’, these culled brands were ones that - despite the company’s best intentions and efforts - simply hadn’t taken off over a three-year period. And these brands had instead distracted attention and resources away from other brands with real potential.

“We really found that focus on reduction has allowed us to get more clarity and really drive the quality leadership of those brands and their positionings,” reflected Quincey at CAGNY this month. “The discipline around the innovation has made a huge difference, driving up success rates a lot over the last five years.”

In fact, Quincey credits disciplined innovation with a success rate today of 3x that of 2019.

Studio X

Another arrow in Coca-Cola’s bow is its efficient and effective marketing: one that’s shifted towards digital. Its 9 operating units are connected through ‘Studio X’, a bespoke agency network.

That’s helped make marketing faster from idea inception to execution, made marketing more effective and efficient, and helped Coca-Cola unlock the opportunities which come with its scale.

“Our ecosystem is not just an incredible physical system - the factories and the trucks and the sheer reach across all those consumers - but it has an incredible ability to lift and shift the best ideas,” said Quincey. “And so, the creation of the nine operating units and the Studio X has increased our ability to lift and shift ideas to go from siloed ideas that worked in certain places, but to really take them around the world.

“We’ve put up some of those programs and ideas here that we’ve moved around, whether it be things like the universal returnable glass bottle, which started in Brazil and has moved around to Europe, Asia Pacific, some of the digital experiences that our bottlers have been doing around order taking and digital platforms have moved much more quickly around our system than they ever used to do. And so, the combination of the refranchize system with the capabilities and the Studio X platforms, is helping ideas move around our system much more quickly.”