Leading global beverage

A recent report by the leading global beverage sales tracker, Beverage Digest, validates it further. According to the report, the market of carbonated drinks fell by 0.6% in 2006 as against a drop of 0.2% in 2005. Seems insignificant, but if energy drinks are kept aside, the decline is a shocking 150% more than last year. Now, there’s the real trouble. Well, one could blame it on the pesticides controversy or on the rising health consciousness across the globe, the consumer verdict even in India is definitely proving detrimental for fizzy drink makers including Coca Cola. With the health drinks category growing globally at 2.8% per annum, not far in the future, the only options left for Coca-Cola (in fact, for all the other cola makers too) would be to make existing products healthier; and of course, diversify. No doubt, Coca Cola has been bolstering its growth strategy with a host of relatively healthier options for quite some time now. And, India doesn’t seem to be an exception to these attempts as well. With the recent launches of Cadbury- Schweppes water and Minute Maid, its pulpy orange juice, the company has clearly indicated a shift towards sports drinks, juices, energy drinks and water. But a look at PepsiCo’s classic foresight and Coke’s strategic defence seems too vulnerable. Some 60% of PepsiCo’s profits come from its snacks and food business. Right from Fritos to Lays to Cracker Jacks and Tostitos, PepsiCo enjoys a virtual monopoly, with Coca Cola nowhere in the scene – the reason why PepsiCo’s net profits have been steadily climbing upwards. On the contrary, Coca Cola’s overdependence on the beverage segment has surely proved detrimental to its bottom-
line, both globally and within India. In such a scenario, though the ‘Drops of Joy’ concept seems emotionally pliable, the fact is that standing alone, it won’t be capable of bringing joy to Coke’s life. CSR or no CSR, if the ‘Real Thing’ doesn’t diversify into health segments, it won’t be long before ‘Drops of Joy’ for Coke are transliterated fatally and sadly into ‘Teardrops of Joy’.


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Source : IIPM Editorial, 2008 ,An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Coca Cola plans to increase

Through the campaign, Coca Cola plans to increase (and showcase) its involvement in community development programmes such as investing in environment protection, supporting the disabled and similar projects. A bird’s eye view and it could simply look like any other corporate social responsibility (CSR) activity taken up by the company. But a closer look inside – and some help from the company grapevine – reveals to us how this is a classic case of CSR being ultimately leveraged to become a profitability statement. But do such campaigns really work in the long run? To get the outside view on this, 4Ps B&M caught up with Superbrands, arguably the world’s most renowned brand valuation and ranking firm. Anmol Dhar, MD of Superbrands, shared with us, “Coca Cola certainly needs to improve its brand image in the society. Whether this sort of CSR initiative will help Coke improve its brand image, well, that’s what time will tell!” Time! But really, the reasons for this contemporary image makeover are not too difficult to come by. Though the biting pesticides controversy, along with ground water depletion or health concerns around its core brands, are behind Coca Cola now, continuously declining profitability is a fear that haunts the company perennially, what with the rate of growth of the soft drinks industry going down dangerously. The real problem for Coca Cola comes in as the traditional cola war, all over the world, seems gradually shifting to a new ground. Soft drink volumes have started witnessing a fall as a rising health-consciousness wave is hitting consumers belatedly. “Consumers have certainly become health conscious and are going to shun carbonated drinks and shift to more nutritious options,” prophesies FMCG analyst Harish Bijur to 4Ps B&M.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

CSR: Coke Socially Responsible!

A strategic manoeuvre by Coke to go the CSR way; profitably

Sometimes, a soft drink is more than just a fizzy, sugared liquid. Sometimes, it symbolizes an exhilarating lifestyle; sometimes, an attitude statement; and sometimes, even a humane, community oriented and socially responsible product... Just a minute, what was that?!? Did you say, carbonateddrinks are becoming ‘socially responsible’?! Well, we don’t know about the whole bandwagon, but at least, that’s how the fizzy drink maker Coca Cola wants to market itself now. A small wait till September-end and India would see ‘Drops of Joy’ literally pouring in from the cola major who has just tested waters with showing the African continent ‘The Coke Side of Life’. For those who came in late,sources at the company affirmed to4Ps B&M that ‘Drops of Joy’ is part of a global campaign started by Coke early this year to project the Coca-Cola corporate brand as a total beverage company (read ‘society friendly organisation’) and not merely a cola and fizz-drink maker. And the investments being lined up by the firm are nothing less than huge. So what’s the official internal dope on the India campaign? Speaking directly to 4Ps B&M, the Coca Cola India spokesperson revealed, “In our bid to further strengthen the communication to different stakeholders, the company is in the process of putting together a corporate advertising campaign. The discussions are at a formative stage and we are currently looking at various options to make this exercise effective and robust.”

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Source : IIPM Editorial, 2008, An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative