« Back to Home Page

Sign up for the 3p daily dispatch:

Coca-Cola’s Best Practices for Aligning with Healthy and Sustainable Customers

Bill Roth | Monday August 15th, 2011 | 7 Comments

You know Coca-Cola. But do you?

What consumer doesn’t recognize the distinctive red and white Coca-Cola logo as the most popular soft drink in the world? Would you be surprised to know that Pepsi is no longer number two, having been displaced by Diet Coke?

Would you be further surprised to learn that Coca-Cola sells 3,500 different products around the world. Or, that approximately 25% of Coca-Cola’s product volume are “low or no-calorie” beverage options?

A few products names owned by Coca-Cola that you might not have been aware of include: Odwalla, vitaminwater, Zico coconut water (minority ownership position), Honest Tea, Minute Maid Juices…

Coca-Cola is still a long way from meeting the fullest expectations of my bright-green friends who are pioneering best practices in zero waste and organic farming. They point to Coca-Cola’s issues regarding plastic-bottle waste streams and a manufacturing footprint that uses over two liters of water in producing each liter of Coke. But Coca-Cola is listening. They have pioneered the use of biodegradable materials in their packaging and since 2004 they have achieved a 9% reduction in their water footprint resulting in 8 billion gallons of water saved annually.

The telling leadership question is how does a company with a mega-brand like Coca-Cola shift its business culture to embrace consumers’ shift toward healthy and green?

To learn more, Coca Cola introduced me to Celeste Bottorf, VP of Live Positively for Coca-Cola North America. Live Positively is Coca Cola’s commitment to making a positive difference regarding their environmental responsibility, their support of active-living programs and their commitment to local communities.

The following is Bottorf’s outline of Coca Cola’s best practices for aligning their product offerings with the consumer’s growing search for healthy and green product solutions:

Customer Research: “At Coca-Cola we are always scouting the horizon. What research has told Coca-Cola is that consumers are expanding their needs/wants toward lower calories drinks, juices, waters and teas that are reflective of their more active lifestyles and increased focus upon diet.”

Bottorf’s comment and Coca-Cola’s demonstrated success in expanding their product offerings are great case studies for businesses seeking to grow revenues. “Active lifestyles and diet” are representative of the American consumer’s focus on personal health. Independent market research continues to report that going green for the American consumer is a search for “in me, on me and around me” solutions to their desires to look good, feel good, connect with a tribe of peers, and protect their loves ones.

Testing: “At Coca Cola we have a testing approach described as failing forward. We understand many tests will fail to create a new revenue stream. But the scale of testing enables us to capture learning in support of our efforts to continuously align our products with our consumers’ wants.”

From my experience working across corporate America, it is the willingness to take risks that often separates a faster growing company from a company with mature revenues. It appears that Coca-Cola has turned the risk-taking corner by rebranding risk as “testing.” And by doing so has been able to look over their “horizon” to capture new product opportunities.

Entrepreneurship: By working in Silicon Valley with early stage companies and their VCs, I have witnessed how entrepreneurial leadership is the key ingredient for moving an idea to commercial success. And entrepreneurship is distinctive from management (with management creating its own value distinctive from the entrepreneur’s focus upon gaining commercial start up and growth). Cola-Cola appears to have grasped this distinction by establishing a separate group of entrepreneurs to execute a function they call Venturing and Emerging Brands.

“We have an incubation function executed by entrepreneurs within Coca Cola called Venturing and Emerging Brands. This group is responsible for launching our new enterprises and products. They are also responsible for finding entrepreneurial companies that have created an exciting product innovation aligned with Coca-Cola’s product strategies and then executing a business relationship with these companies that can include acquiring or partnering with them. This approach of deploying entrepreneurs to do what they do best is a key component in Coca-Cola’s success in discovering, developing and growing new product revenues.”

Scale: “The end result of Coca Cola’s customer research, testing and venturing activities is scale. Coca-Cola is world class in our ability to grow a brand and product to scale. Our ability to make a new product or innovation available to a mass market is key to our leadership in advancing sustainable and healthy consumer consumption. We enable mass market customer discovery.”

Coca-Cola’s focus on sustainability is expanding from its Live Positively efforts with the recent announcement of their first Chief Sustainability Officer, Beatriz Perez. Perez’s prior role was Chief Marketing Officer for North America, which demonstrates the increasing increasing importance of developing green/healthy product innovations.

In summary, Coca-Cola continues to win sales by deploying the following three practices for aligning with the American consumers’ increasing shift toward smart, healthy and green products:

  1. Consumer Driven Leadership Focus. Alignment with consumers is an obvious leadership foundation that can be a huge challenge for companies with legacy products confronting a consumer shift in value and values. Companies like Coca-Cola, P&G or Apple continue to achieve industry-leading growth through their leadership culture that actively pursues continuous alignment with the consumers’ evolving needs and values.
  2. Empowering Entrepreneurs. Empowering entrepreneurship in pursuit of both transformative and disruptive product offerings is a key to any company’s growth. Whether it’s iPads, LED lighting or coconut water, it is the ability to create new paths for aligning with consumers that is critical to achieving sustainable revenue growth.
  3. Values-Based Management. Market research from firms like the Shelton Group and Cohn & Wolfe continue to affirm that consumers are embracing smart, healthy and green as values-attributes for their lives and the products they buy. Companies like Coca-Colas are enriching their management culture with organizational designs that embrace a function like Live Positively to inspire a values-based management focus.

Coming Soon: An article profiling Coca-Cola’s Odwalla and their “how to” best practices for growing product offerings that align value with values.

***

Bill Roth is the founder of Earth 2017, a company that connects businesses with customers who are searching for smart, healthy and green solutions. His book, The Secret Green Sauce, profiles best practices of businesses making money going green. He is implementing Green Builds Business, an 11-city outreach program created by the Hispanic Chamber of Commerce Foundation with funding from Walmart that is coaching business owners on best practices for making money and a difference within 120 days.


▼▼▼      7 Comments     ▼▼▼

Newsletter Signup
  • Alex

    Is this for real? Coca Cola is depleting aquifers, is polluting the environment and is involved in human rights violations. Coca Cola doesn’t listen and doesn’t care and I’m surprised to read here about how good dear Coke is.

    Well, I know I won’t be reading you anymore…

    • Dave Shires

      Alex, your comment is hyperbolic and lacking in substance. That doesn’t mean you don’t have the right to criticize Coke, but do so with some deeper thoughts, and some links perhaps?

  • Irene Schmid

    True leadership is changing people’s behavior, not identifying market trends and responding to them. If Coca Cola could shift “me, me, me” attitudes to “we” attitudes, then I would be impressed Every time I see “Vitamin Water” I shake my head: who needs water with artificial colors and flavones in a plastic bottle, when in most circumstances far healthier alternatives like real fruit juice or plain tap water are preferable? Coca Cola’s aggressive marketing campaigns mislead people and draw attention away from healthier alternatives. I don’t think this company can reinvent itself, and look forward to the day when it faces class action lawsuits for all the damage it did during the soft-drink heyday, and continues to do today with much of it’s product line.

  • http://www.earth2017.com Bill Roth

    Thank you Alex and Irene for your insights.

    As stated in the article, and as your comments reinforce, Coca Cola’s shift toward “bright green” behavior is a work in progress. What this article attempts to point out is that they are attempting operational and product innovations that align with the growing customers’ expectations for healthy and green solutions. Bill

  • Dave Shires

    Good stuff. I am all for praising a company’s incremental changes and it sounds like Coke is on the right track.

    Of course in classic “corporate-think” style, they turn this into something vastly more complicated than it needs to be.

    Coke sells happiness and inclusiveness. They support this with additional sales of sugar water.

    Why, exactly, consumers derive a feeling of belonging and happiness from sugar water with clever packaging is one of the great mysteries of human psychology. But it doesn’t make Coke’s business model “wrong”, it just says something about humanity.

    One day, I suspect Coke could get rid of the sugar water and just sell red placards or something – greatly reducing their environmental impact… but now i’m getting way too theoretical :-)

  • http://www.earth2017.com Bill Roth

    Dave, thanks for your witty and insightful comments.

    In the spirit of fun: BUT what is the environmental footprint of a red placard? Will it be biodegradable? If so, does our waste handling infrastructure have the capacity to compost the red placard waste stream or will this be another biodegradable package delivered to the waste dump inside a plastic garbage bag? How is the red coloring produced? Any toxins? Could using red have gang ties sensibilities, what about red and blue, and maybe some white? If we claim zero calories for the placard is that greenwashing?

    Just having fun on this one, hope you don’t mind!

  • http://www.beveragenamespace.yolasite.com Cherie Moore

    That’s a great article and good news that one of the worlds biggest companies are working on being more sustainable and earth friendly! Better late than never.
    Coca-Cola may want to check out The Award Winning “Beverage Name Space” for improving their product packaging to be more sustainable and “Personal”. The “Beverage Name Space” makes ready to drink beverage labels and containers easy to instantly personalize. This reduces waste in the environment and ends beverage confusion among consumers. Concepts4Today’s New and Original Innovation is available through simple licensing with Concepts4Today and is patent pending.
    Check us out! We make Beverages and Containers “Personal”.