“The health and wellness trend has set up, almost teed up, a tremendous opportunity for the Coca-Cola brand with our smaller packages” and the recent launch of Coke Life, which has a third less calories, said Sandy Douglas, senior vice president of the global chief customer office and president of Coca-Cola North America.
Consumers “love” the smaller 7.5-ounce cans and 8-ounce bottles, which cost more per ounce and in most cases more per spending occasion than the more traditional 12-ounce bottles and the larger 1.25-liter and 2-liter bottles, he told investment analysts at the Morgan Stanley Global Consumer conference Nov. 19.
He explained the 7.5-ounce mini-cans cost consumers 40 cents each and the 8-ounce bottles cost 81 cents each compared to the larger traditional 12-ounce container, which cost 50 cents. This breaks down to a cost per ounce of 5 cents for the 7.5-ounce can, 10 cents for the 8-ounce bottle and 4 cents for the 12-ounce container.
For the mini-cans, this equals “about 33% more sales per unit, but about a third less gallons per unit,” Douglas said.
He added: “Purchase intent for the mini-cans versus the 12-ounce cans, among moms, is up 25%,” in part because the smaller option eliminates some of their concerns with the brand, including waste and too much per serving.
Overall, sales of the smaller containers are up a combined 9% year to date through October, compared to only 0.1% for sales of the 12-ounce cans and 2-liter bottles, Douglas noted.
Douglas expects the health and wellness trend to continue and she says Coca-Cola plans to meet consumers with the sizes they want but at premium prices that still feel low to consumers.
“Health and wellness is an important permanent trend. It’s not a short term plan,” and “we have to be in a competitively advantageous place [by providing] a solution for consumers who want to make positive changes but also want to treat themselves to the best tasting drinks,” he said.
Coke Life taps into health trend
The Coca-Cola Company also is tapping into the health and wellness trend and consumers’ desire for natural products with its recent launch of Coke Life, Douglas said.
“Diet products are struggling across the store,” but Coke Life “is Coca-Cola that’s sweetened with cane sugar and stevia, and has a third less calories. You’ll see it in stores now in glass bottles, premium-priced as close to the natural section as we can market it,” he said. (Read more about the launch of Coke Life HERE.)
Douglas was unwilling to predict the eventual consumer reach of Coke Life compared to other products like Coke Zero, but he noted that the company sees Coke Life “as a platform.”
“It’s not an end product. It has a formula today that tastes great … but it’s going to continue to get an improving formula, probably less calories, better taste. We’ll keep working on it until we think it is the perfect Coca-Cola for people who are looking for more natural ingredients and natural positioning,” he said.
By accessing the natural segment, Coke Life will “help us round the brand out for maximum horsepower,” he added.
Teaming up to reach a common goal
Finally, Douglas said The Coca-Cola Company is working in a “pre-competitive way” with retailers and consumer products companies to help consumers attain their health and wellness goals, Douglas said.
Through the Healthy Weight Commitment Foundation, Coca-Cola and others are working together to take 1.5 trillion calories out of the American diet by offering healthier option and helping with portion control. (Read more about the foundation HERE.)