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

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.

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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.

First Green Business Coach for Entrepreneur.com. Founder of EARTH 2017, a website posting economic analysis on disruptive trends impacting communities and businesses. President of NCCT, a consulting company that coaches CEOs and business owners on pricing and marketing best practices proven to win the millennial generation, and their moms, as customers.