Will Coke Ever Go Out of Business

Coca-Cola`s decision across Europe to promote its entire range, rather than each brand separately, has clear advantages: it alleviates confusion around its ever-growing portfolio of brand extensions; it diverts attention from its unhealthy products to low-calorie or calorie-free variants; and it has the potential to reduce costs. Coca-Cola is trying to counter this slowdown by diversifying its portfolio of soft drinks (including tea, juices, mineral water and energy drinks). Refresh its carbonated products with lower-calorie versions, smaller portions and new flavors; and expansion through investments and acquisitions, including the nearly 19% stake in Monster Beverage (NASDAQ: MNST) and the recent acquisition of Costa Coffee. He told Business Insider: „Coca-Cola will always be Cola`s leading brand until the end of time. But the value of this category of cola will decrease over the next 20 years. It is not good to be a big fish in a smaller and smaller pond. The days when Coca-Cola was the world`s biggest brand are gone forever. Kent`s „transition“ is already evident in some of its recent actions: it has invited 10 agencies to submit ideas for its upcoming global marketing campaign. In Europe, he redesigned packaging to make all its different flavors look the same, and he is abandoning his marketing for individual brands like Diet Coke and Coke Zero. Instead, all marketing will be consolidated under the Coca-Cola brand in the region (you will continue to see other products in the portfolio in the ads, but there will no longer be individual ads like the famous „Diet Coke hunk“ campaign). Cheung said: „There are few other brands that could challenge Coca-Cola by achieving this, and all of this is due to the historical culture of the leading Coca-Cola brand. If anything is going to revive the company, it will be this signature brand – which is the best known in the world.

On Wednesday, July 1, The Coca-Cola Company announced that it would end an entire beverage brand and lay off more than 300 employees. By the end of July, you won`t see smoothies and Odwalla juice on your food shelves. Coca-Cola`s comparable gross margin also increased from 62.7% in 2017 to 63.1% in 2018, and its comparable operating margin increased from 26.9% to 30.8%. It attributed these margin improvements to the divestiture of several bottling plants, continued productivity and cost-cutting efforts, and the depriorization of low-margin products (such as water and tea) in certain markets. These improvements suggest that Coca-Cola`s revenues are not managed by a cliff. And that`s because nuanced consumption habits continue to spread, Ritson added: „Natural products, organic ingredients, incredibly fresh origin, local origin – these were originally the buzzwords of small groups of Maven consumers, but this movement has become more pronounced in recent years in the developed world. And it will only strengthen in the years to come. Coca-Cola`s success and past dominance in the 20th century blinded them to the very different market conditions that the 21st century ushered in and suddenly made them vulnerable to change. Diversification will also be essential if Coca-Cola is to adapt to ever-changing consumer consumption trends, and the company is already booming in this area. Earlier this year, for example, it launched a premium milk called Fairlife in the U.S., and last year Coca-Cola paid $2.15 billion for a 16.7 percent stake in Monster Energy to expand its reach into the energy drink market. And in 2013, Coca-Cola increased its stake in Innocent Drinks to nearly 100% to increase its share of the European smoothie and juice market.

No matter what statistics you look at, Coca-Cola`s value as a company seems to be eroding. The sales growth announced by Coca-Cola faced two major headwinds: the strength of the US dollar and the rescheduling of bottling plants. Coca-Cola has already bottled and sold much of its beverages, generating up to five times more revenue per beverage than concentrated syrup. But it`s a capital-intensive company that`s squeezing its margins – so in recent years it`s returned much of its bottling operations to independent bottlers. This strategy boosted margins, but widened the gap between organic and reported sales. This downward trend is not due to a sudden and important catalyst. As the beverage Digest report explains: „The volume of branded Coca-Cola increased (0.1%), but only slightly. However, the brand was on the rise after several years of decline. The last time the Coca-Cola brand developed was in 2000. We asked what would happen to brand managers and marketers who worked on certain brands like Diet Coke or Coke Zero. A Coca-Cola spokeswoman told us the company is undergoing a global reorganization that will affect 1,600 to 1,800 jobs at companies, Coca-Cola North America and Coca-Cola International — but it`s too early to say how many roles in Europe will be affected.

If we look at Coca-Cola`s case volume and regional growth, its core business still looks healthy. Coca-Cola`s unit volume increased annually in 2018 in all regions of the world, with the exception of Latin America, which experienced steady growth. Organic sales increased in all regions except North America, where growth remained unchanged. These results suggest that coca-Cola`s portfolio expansion has paid off and has offset the weakness of its flagship lemonade brands with other beverages. One of the things that characterized Muhtar Kent`s reign at the helm of Coca-Cola is his long-term outlook for the company. In 2010, he introduced the company`s „Vision 2020,“ which is based on six socio-economic trends that it hopes will help it double its sales by 2020. .