GLOBAL: The inexorable rise of the craft trend is knocking on the doors of the soft-drink giant, as spirit sippers look to premium alternatives with which to mix their drinks. Coca-Cola sees a way in with the leverage of its heritage.
According to a report from Bloomberg, the company’s CEO James Quincey - notable for his interest in diversification and his insistence that the Coca-Cola brand should not necessarily be the greatest focus of the company – is exploring the acquisition of soft-drinks that chime with modern consumers.
With the aim of becoming a “total beverage company,” Quincey has identified mixers as a promising area for investments. On an investor call last month he said “More consumers, most notably adults, are seeking unique and distinct products with sophisticated flavours, quality ingredients and smaller-scale craft production.”
The trend toward craft is fuelling a resurgence in quality mixers, he added. In Spain, which has long maintained the practice of the ‘copa,’ when the chosen mixer is served in its bottle alongside the drink, the company has introduced mixer line called Royal Bliss, which will only be sold in bars and restaurants.
Elsewhere, the company has also relaunched its Schweppes brand in the UK, with a premium extension, Schweppes 1783. This chimes with a trend that Pepsi followed last year with ‘Pepsi 1893’ in the US, which boasted “a blend of premium cola nut extract, real sugar and sparkling water”.
At the same time, the Coca-Cola Company is looking forward. As Bloomberg noted, the new chief’s interest in investing early in upstarts could lead to a richer engagement with Q Drinks LLC, a premium mixer startup with a number of connections to Coke. The opportunity, says Q Drink’s CEO, Jordan Silbert, is significant, however.
“Craft mixers are exploding right now, and it makes perfect sense,” Silbert said. “More and more people are drinking premium spirits, and you want to mix that with a mixer of comparable quality and sophistication.”
The news follows the company’s latest earnings call, which reported slightly better sales than investors had expected; sales fell 15% in Q2 2017. Currently, the brand is engaged in profound restructuring, including a shift from its low-margin bottling business and toward building stronger brands.
Part of the challenge, noted also by PepsiCo, is a consumer interest in healthier options, leading to product innovations from both, and the suggestion from Coke that it would “reformulate” over 500 products this year, the Financial Times reported.
Sourced from Bloomberg, Financial Times, Marketing Week; additional content by WARC staff