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Coca-Cola on why ‘getting better at small’ is a big bet as it expands strategy across its portfolio

Coke's shrinking packaging

Coca-Cola has made no secret about its efforts to introduce smaller pack sizes in its Coke product range, but the drinks behemoth is now applying this strategy across Fanta and Sprite as its small packages grow at “nearly double digit rate”.

The business began last year pushing smaller cans and bottles at premium prices to lift margins in North America, a play that increased prices 3% globally in the second quarter in July as it increasingly focuses on revenue over volume to spur growth following a series of disappointing financial quarters.

Now, Coca-Cola is replicating the model across Fanta and Sprite as it looks to take advantage of consumer trends. Speaking at the Morgan Stanley conference yesterday, Coca-Cola North America President, Sandy Douglas, said that “getting better at small” will continue to be a “big bet” for the drinks company.

“We still have a lot of growth opportunity to capture, the transaction packs only make up 15% of our portfolios. So getting better at small will continue to be a big bet for us going forward in this very large and important segment of our business.

“We are focused and capturing the full potential of these brands [Fanta and Sprite] as well by executing that same occasion price package strategy and innovating with both new flavours and new package sizes. We are also launching compelling new marketing to support these brands and our new WannaSprite that LeBron James has done with us is a great example of how we are leveraging the power of the Sprite brand coupled with the strong celebrity endorsement to fuel the brand’s momentum.”

Douglas added that while he can’t predict how much percentage growth smaller packaging will ultimately account for across the Coca-Coca portfolio, he said: “What I believe however, is a long way”.

Ready-to-drink coffee is another area that the business is betting big on. Early next year it is launching two flavours of both Cold Brew Coffees and bottle tea lattes. Coca-Cola also recently signed a deal to produce, distribute and market a line of Dunkin Donuts branded ice coffee beverages, which will be sold in grocery stores, convenient stores and in Dunkin Donuts’ restaurants.

“Ready-to-drink coffee will become a big bet for us a competitive opportunity with tremendous growth and we have more news to come,” added Douglas.

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