Wednesday, April 5, 2017

Coca Cola Life: A failed attempt to rejuvenate Coca Cola brand for the new millennium

After reading the articles related to new trends in technology and global forces that are expected to dramatically change the consumer world and reading the historical strategy evolution of Cola businesses; an example of how companies are struggling to update their structures to these new forces came to my mind.

That is the case of Coca Cola Life, a product developed by Coca Cola subsidiaries in Chile and Argentina, introduced in 2013. The case exemplify one of the latest attempts of this company to align with current trends in food and beverages industry. The main product innovation was referred to the following aspects: innovation to the formula, the design of the brand and marketing strategy. After a couple of years in different markets, the product failed to attract new consumers, in particular the millennial segment, who are thought to demand for healthier and more sustainable products.
The concept behind Coca Cola Life was simple; trying to appeal to the old sugar flavor nostalgia with a hint of a modern sweetener -stevia- which is a plant based extract with higher reputation than other chemicals like aspartame, sucralose, or corn syrup with minimum calories. Coca-Cola Life is the first branded Coke product to use stevia leaf  extract. However, it is not the first product owned by the Coca-Cola company to use stevia. Over 45 products distributed by Coca-Cola use stevia extract, including Vitamin Water and Seagram's Ginger Ale. It has 27 kilocalories/100 mL, containing only 60% of the calories of regular Coca-Cola. It was created in Argentina and Chile after five years of research together in these countries. Coca-Cola Life can be compared with Pepsi True, which also uses sugar and stevia as a sweetener. With 60 calories per 8 ounces (240 ml), coca cola life is either a diet coke or a regular one. Its references to a healthier lifestyle are not only found in its formula but also in its self proclaimed sustainable packaging; which comes in glass, 30 percent recyclable plastic bottle, with fossil-fuel plastic accounting for the remaining 70 percent of the bottle. Coca-Cola Life was launched in Argentina in June 2013, in Chile in November of that year, in Sweden in June 2014 and in the UK in September 2014. It has subsequently been launched in many other countries. Coca-Cola Life tried to co-exist with Diet Coke and Coca-Cola Zero in the Argentine and Chilean market, but it has been slowly removed from those markets due to its low reception from customers.

There are many factors that could explain the failure of this product, like that does not provide a significant advantage from Diet Coke or Coca Cola Zero in terms of calorie content. The innovation carried out in the formula or packaging is questionable, since it continuous is reliance in sugar and the recyclable content on the bottles only accounts for 30%.

The historic drive for success of the brand -rooted in tradition and unique flavor- may not longing work in the future market, and may suffer of obsolescence in a context driven by public access to data and community involvement; these new forces oppose to the long-standing “secrecy” of the Coca Cola formula.

Moreover, the beverage market has experienced enormous fragmentation in recent years. The concept of a healthy food is no longer referred only to a low calories count, but also relates to the whole value chain and life cycle of the product, where consumers are increasingly more  involved in knowing about the sustainability of the whole production process, the quality of raw materials, employment structure and distribution footprint; all aspects in where the traditional business model of Coca Cola performs poorly.

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