Coca-Cola, the beverage manufacturer, is streamlining its brand portfolio to ensure its largest assets and best new products thrive, while slow-moving “zombie” beverages are killed off.

The Atlanta, Georgia-based enterprise uses a three-tier formula to organise its sprawling range of drinks, which is led by “leaders”, the name given to its biggest offerings.

Next comes “challengers”, a category of brands which could ultimately become “leaders”, and then “explorers”, which are smaller, disruptive brands.

And James Quincey, the Coca-Cola Co.’s CEO, revealed that making sure its top-tier brands – say, its eponymous carbonated drink – are in a robust position is a priority as the firm reacts to the on-going COVID-19 pandemic.

“We are prioritising a portfolio that combines strong global brands, plus regional and scaled local brands, to address critical age cohorts, need-based [occasions] and drinking occasions,” he said on a conference call with investors. (For more, read WARC's in-depth report: How Coca-Cola is picking winners and killing off "zombie" brands in its portfolio.)

The flip-side of Coca-Cola’s refreshed strategy is ensuring that the products which consistently lag behind are not afforded a shelf life beyond their merit.

“Of our 400 master brands, more than half are single-country brands with little-to-no scale,” Quincey said. “The total combined revenue of those brands is approximately 2% of our total. They’re growing slower than the company average, but each one still requires resources and investments.

“We have not been assertive enough and directive enough at weeding out the brands that have not worked so we can redirect resources onto brands that have the most opportunity.”

The Coca-Cola Co., he continued, needs to be more ruthless in dispatching assets that are largely inert – a process he described as “exiting some zombie brands” – rather than solely trimming individual SKUs.

An example is Odwalla, a juice and smoothie brand that Coca-Cola acquired in 2001, but which is being pulled from circulation at the end of July 2020. This offering has “struggled over the last several years,” noted Quincey.

Having the courage to cut such items from its portfolio gives “us the flexibility to support our investments in brands like Minute Maid and Simply [juices], and to continue to scale rising stars like Topo Chico [bottled water],” he added.

Sourced from WARC