The corporation intends to eliminate almost half of its brands, giving up those that bring a minimum income.
Coca-Cola has a portfolio of 430 brands to date, but half of them generates only 2 percent of its revenue. In challenging economic times, when net income is falling, supporting such brands is an unacceptable luxury. Thus, in the second quarter, Coca-Cola's revenue fell immediately by 28%, an increase that has not been observed for over 30 years. Subsequently, thanks to the actions taken, the decline was able to stop. Sales began to grow again, but the growth rate was still insufficient.
Some of these brands continue to exist solely because of fans. For example, the diet drink brand Tab launched back in the 1960s, lasted so long precisely because of a well-established fan base. It's fans sometimes even wrote to the company's representatives with complaints that they could not buy a drink from their favorite brand.
But hard times require decisive action. Earlier, the company had already announced its intention to get rid of Tab and Odwalla, Zico, Coca-Cola Life, and Diet Coke Feisty Cherry. The management plans now include a global review of existing brands. Some brands will be abandoned everywhere, while others will remain in some markets. For example, the sports drink Powerade will disappear from stores in the United States but stay in Europe.
At the same time, the company said it plans to launch new brands. For example, in 2021, it intends to launch Topo Chico Hard Seltzer, an alcoholic beverage designed for the Latin American market. Coca-Cola is also actively working towards the coffee market.
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26 OCTOBER 2020, USA