Don't Look Backward With Your Branding: How Coca-Cola Is Going Flat

Since 2000, Google has developed Maps, Earth, Gmail, Glass, and a self-driving car, among many other breakthrough products. And Coke?

Recently, David Picker, a former top movie executive who shepherded such '60s and '70s screen classics as Midnight Cowboy, Lenny, and A Hard Day’s Night, wrote his memoirs. In his book, he discussed what it was like working for Columbia, at a time in the 1980s when the studio was owned by the Coca-Cola Company. He recalled that one of the top executives at the time, Roberto Goizueta, said to him, “Coca-Cola is a religion, and my job is to convince people that if they cannot live a life fulfilled if they don’t drink this combination of water and corn syrup…that’s my job.”

Now that’s some powerful branding.

Of course, this 127-year-old company has always worshipped at the altar of branding, from when it first promoted its product as a patent medicine to when it later refocused on its refreshing attributes. The Coke corporate powers were determined to turn their sweet-flavored fizzy water into a phenomenon--and they quickly did through an incredible string of marketing successes. In the process, the soft drink became such a global business behemoth that back in 2000, when Interbrand, a brand consulting organization, began compiling its best Global Brands Report, it was no shocker when Coke topped the list--and continued to keep the number one position every single year.

Until this one.

The year 2013 was when Apple and Google leaped ahead of the beverage giant and put it in third place. The tech companies rose in value 28% and 34% respectively, while Coke only managed a modest 2% gain. And perhaps it was lucky to manage that increase, as the soda giants in general have had a rocky decade and a half; not only have consumers been presented with more and more beverage choices on the supermarket shelves, but, since 1998, there has also been a steady per capita decrease in the consumption of Coke, Pepsi, Dr. Pepper, and the like.

The reason? The growing concern over the obesity problem in the U.S. and other developed countries, and sugary soda’s role in that health threat (and perhaps even diet soda’s as well!).

Here’s a great graph illustrating the top brands’ movement over the past 13 yearsin which you can see that the new No. 1 brand, Apple, wasn’t even represented in the first Top Ten list. What’s happened since that year? The iPod in 2001. The iPhone in 2007. The iPad in 2010. Three revolutionary products that have become must-haves in the homes of those who can afford them and propelled the tech company’s impact to almost unimaginable heights.

As for the new No. 2 brand, Google? Well, since 2000, they’ve developed Google Maps, Google Earth, Gmail, Google Glasses, a self-driving car, and many more breakthrough online and offline products. And, oh yeah, they bought YouTube, the leading Internet video site.

Now, let’s turn to see what’s happened since the turn of the millennium in Coca-Cola land. Besides introducing such not-quite-sensations as Vanilla Coke, they also purchased the Energy Brands beverage company in 2007. Energy Brands, if you didn’t know, makes Vitaminwater, which is the subject of a current lawsuit alleging that its purported nutritional benefits are almost nonexistent, unlike the eight teaspoons of sugar that definitely do exist in each bottle of the beverage (the same amount contained in three and a third Krispy Kreme donuts). Then there's Coca-Cola Life.

In other words, the geniuses at Coca-Cola simply reached out and grabbed the newest way to secretly sell the public unhealthy sugar water!

While Google and Apple have continually looked forward over the past 13 years, always attempting to capture the imagination of their public with exciting new technology and design, Coke has looked for new marketing gimmicks to entice customers into buying highly profitable, highly fattening sugar water (while at the same time showing their “concern” for the obesity issue in a series of new initiatives that, quite frankly, were simply seen as ineffective and transparent public relations).

There’s no question that Coca-Cola is and most likely will always be a powerful brand. But there’s also no question the company is guilty of repeating past mistakes, rather than righting its course. There is profit to be made with the right healthy beverage brand, and the company has not done enough to change its strategy and revamp its product line.

Nate Abrams, one of several millennials asked to respond to Coke’s anti-obesity campaign, summed it up best when he commented:

"I don't see Coke or any other beverage brand as an evil empire. There is nothing wrong with seeking profit by selling people what they want. But if they want to be seen as a socially responsible corporation . . . they will have to change their product portfolio. There is profit to be made in this space. Just ask Whole Foods. And it can be made at price points much lower than those of Whole Foods. Coke has the resources to create and market beverages that don't drive obesity and profit from them. The question is, do they have the will?"

If the heads of Coke don’t answer that question with a resounding “yes,” it will be interesting to see where their brand ranks in another 13 years.

[Image: Flickr user Scott Akerman]

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3 Comments

  • Sven Heesterman

    It is true that coke has done very little innovation since 2000.

    But is unfair to compare an industry that is based on a 5000 year old need to a 10 year old mix of need and desire.