Coke Looks Beyond Soda
There is no doubt that you are familiar with Coca-Cola; enter any convenience store or gas station in practically any corner of the globe, and you will find the famous beverage in the refrigerator there. This, of course, is a testament to the fact that the tasty drink occupies an integral role in the lives of almost everyone in the world, which is why consumers continue to demand it well over one hundred years after its introduction in 1886.
As a result of this steady, unrelenting demand over the years, the Coca-Cola Company has been able to concentrate the vast majority of its efforts on the original Cola product. In fact, with the exception of Coke’s acquisition of Minute Maid in 1960, the company pursued very little diversification during the first century of its history.
However, the case has not been the same in recent years. Due to society’s greater awareness of the consequences of high-sugar diets, consumers are seeking out healthier beverages, and in response to this, Coke is expanding its beverage portfolio to appeal to those health-conscious consumers and maintain its dominance in the beverage market.
To detail some of the developments that have occurred under Coke’s strategy of expansion, in 2007, Coke acquired Glaceau, the parent company of Vitaminwater, for $4.2 billion, and about one year ago, it announced its purchase of Costa Coffee, a leading coffee maker in Europe that recently made its products available in the US, for $4.9 billion.
Additionally, just this month, Coke announced that it purchased the remaining 57.5% of fairlife that it did not previously own. On top of all this, perhaps the biggest news is that this past month, Coke brought its brand new energy drink, Coke Energy, to market in the US. (The energy drink first reached store shelves outside the US.)
Amid all these changes Coke is making, there is no doubt that the company will have to consider how its public perception might change given the fact that the products the company currently offers do not resemble those it offered in the past. So, will Coke be able to adapt to the changing consumer landscape and also retain its identity as a maker of soft drinks? Or will the company’s efforts to diversify its product line ultimately result in its underlying identity changing?
Remember, though, that the above facts about Coke’s new subsidiaries are a surprise for a reason: despite the wide-ranging array of beverages that Coke offers, the company continues to be defined and recognized by its main product, Coca-Cola. Did you know that Minute Maid Lemonade is ultimately a Coca-Cola product?
Well, neither did I, and it is unlikely that Coke will ever attempt to distinguish itself from the brands that operate under it since its relationship with these brands is symbiotic in nature. Therefore, a separation of any kind would be unwise. In short, this is why Coke (and us Coke fans) should not worry about the company’s public perception changing for the worse even amid the various and recurrent changes that are taking place underneath the skin of the company.
Coke is, and always will be, Coke.
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Written by Jared Nussbaum & Edited by Alexander Fleiss