As Coca-Cola moves towards a non-carbonated future, it looks to Asia Pacific for an innovative spark
The non-carbonated drink industry in Asia Pacific is relatively less developed as compared to other regions around the world, which gives The Coca-Cola Company ample room to experiment and test new products.
In addition, with the big markets in APAC having individual particularities, both on the consumer and trade level, there is no one APAC-typical market.
Speaking to The Drum on the sidelines of Innovfest Unbound 2018 in Singapore in June, Javier Meza, chief marketing officer of Asia Pacific Group at The Coca-Cola Company, says this represent a lot of possibilities within digitalisation for Coca-Cola in countries like Japan, where it has a booming vending machine business, owning around one million vending machines.
Japan is one of the markets where Coca-Cola does hundreds of innovations per year and where it launches at least two products per week. It is also the first country that Coca-Cola launched its first-ever alcohol drink in its 125-year history, as it wants to use the country as a testbed to test ideas before bringing those ideas to other markets.
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“We don't have vending machines like that anywhere else and that creates for us a unique way of doing business in Japan. We own and interact with consumers that use the one million vending machines that we own, which means the data is huge opportunity,” explains Meza. “When you see the number of litres per year people consume non-carbonated drink in APAC, it is still significantly lower versus other parts of the world.”
“However, the number is fragmented. So, you have all kinds of data ranges and all kind of players. There are a lot of small kind of players around doing a really excellent job understanding consumer insights to put in solutions in front of consumers.”
That said, there are still growth opportunities to be tap, says Meza, even though he admits that capturing the growth opportunities will be very hard for Coca-Cola in APAC as its model has always been focused on selling to the masses.
“It has to do both with capabilities and the worldwide expansion of our portfolio. On the capabilities side, one of our priorities is getting better at segmenting consumer cultural niches. The reality is, the brands that are winning, are our competitor brands, as they have been able to identify specific consumer segments with what they need and want, and offer that to them,” he explains.
“We sell to a lot of people, which means the ability to segment differently identify new opportunity and serve them is something we are working on. It's not as easy for us. But, we are getting better.”
One of the methods that Coca-Cola is using is to find local stories that resonate with people, according to Meza, as stories from aboard do not have the same level of emotion or niche in APAC.
For example, during the Trump-Kim Summit in June in Singapore, the FMCG giant created bilingual cans with messages in English and Korean about world peace. It also took over an out-of-home billboard for four days of the Summit in Changi Airport Terminal 2 arrival hall, using eight digital faces to promote its #PathToPeace message.
This was done because aside from using localised stories, Coca-Cola has always supported and celebrated positive change and progression in societies all over the world, Pratik Thakar, director and head of integrated marketing communications for the ASEAN Business Unit at The Coca-Cola Company, tells The Drum.
“Our most famous one is the 'hilltop advert' from 1971, where we celebrate multiculturalism, unity, peace and love. Coca-Cola believes in uniting people and bridging divides. The summit was a perfect platform for the brand to demonstrate so. The idea was to seize the moment to be at the crossroad of an important time in history to spread our message of hope and optimism,” he adds.
While there have been many brands who have tried and failed to create their own localised stories, Pratik says Coca-Cola is a ‘stubbornly optimistic’ company as its role is to strive to see the best in humanity, and then help everyone else to see it too, pointing out that its advertising legacy is made up of several examples like the Summit, where Coca-Cola has celebrated moments of optimism for change.
“The Summit was on everyone’s top of mind. Context is key to any ‘point-of-view’ campaign. We kept our theme simple, focusing on ‘peace, hope and understanding’ – keywords that were literally on everyone’s minds and the underlying values that inspired and guided the historic summit to take place,” he explains.
Building a non-carbonated future
Coca-Cola finding ways to build up its non-carbonated inventory comes as its sales are dipping globally is due to its struggle to attract new drinkers as well as consumers increasingly making decisions based on what they perceived to be healthier choices.
In 2017, it had to rebrand its Coca-Cola Zero beverage as it sought to increase promotion of no- and low-sugar Coca-Cola options to help people looking to reduce their consumption of added sugars, while in early 2018, it relaunched its Diet Coke in North America with a new colourful rebrand that brings with it a handful of premium fruity flavours.
Another challenge Coca-Cola faces is the sugar tax, especially in APAC. Countries like Brunei and Thailand introduced a sugar tax in 2017 to wide range of sugar-sweetened beverages, while in Singapore, the government is considering similar measures after Prime Minister Lee Hsien Loong highlighted that one in nine Singaporeans are diagnosed with diabetes during his National Day rally speech in 2017.
While Meza admits consumers’ changing diet and sugar taxes are impacting Coca-Cola, it is also shaping its struggle, stressing that it is imperative for Coca-Cola to continue to be consumer-centric and if consumers are looking for other options, it will offer it to them. He highlights Coca-Cola’s one brand strategy, which promotes the Coca-Cola brand as much more than one product.
“It's a brand idea. And that brand idea, we can offer you to several products. If you want Coca-Cola with full sugar, you can have it. If you want Coca-Cola with 30% less sugar, you can have it now. We are mixing in Mexico. Very soon in Singapore. You want Coca-Cola with zero sugar? You can have it. If you wanted Coca-Cola with only stevia, you can have it. It is already launched in New Zealand, where we are testing it,” explains Meza.
“We want to let people know that the brand idea is much bigger than any of the products. In the same way, we are convinced that the Coca-Cola company is much bigger than the Coca-Cola brand. And, because of that, we will expand our portfolio, so we can address those consumer needs and expectations.”