Noting a planned 40% increase in innovation projects in 2021 versus 2020, “which was heavily impacted by our response to the pandemic,” to drive 20% incremental gross profits, CEO James Quincey told attendees at the Consumer Analyst Group of New York’s virtual 2021 meeting on Feb. 19 that “we must continue to bring new, relevant product and equipment ideas to the table.”
But, he added, “innovation must be more than just flavor extensions.”
As such, he explained, Coca-Cola is “approaching innovation through an evolved set of lenses and with more rigorous objectives” that will place a greater emphasis on big bets and projects that can achieve scale that is relevant for the company. As such, these “big bets” will account for 45% of the 2021 innovation pipeline and 25% of total projects.
One of those big bets will be a “reboot” of Coke Energy, which launched early last year but was stymied by the lockdowns, Quincey said.
“Clearly we were disappointed with the outcome in 2020 with Coke Energy, and actually we had to hold a number of innovations in 2020 – it was just not the right thing to do for the supply chain and many customers also focused on SKU ranges to keep the shelves full and the supply chains flowing well,” he explained.
The initial launch was not a total loss, Quincey stressed, noting that the company confirmed that the line will be accretive to the category based on initial consumer interest originating from those who were new to the energy category.
“It has given us good insights into how the brand and the packing and everything resonates with consumers,” and the company is optimistic as it looks to reboot Coke Energy to “try to have much better progress this year, which hopefully will be auspicious for innovation in general and Coke Energy in particular,” Quincey added.
Beyond Coke Energy, Quincey said that the Coca-Cola Co.’s interest in ‘big bets’ could be tech driven, include enhanced packaging or formula enhancements. But the theme throughout is that they must be consumer-centric.
'Thoughtful and intelligent experiments'
Despite a strategic shift to even more “purposeful big bets,” Coca-Cola co. will still pursue some “thoughtful and intelligent experiments,” Quincey said.
“We have approximately 11 of them for 2021, and they comprise 20% of the value in the global pipeline,” he said, adding, “in the future, we expect these intelligent, focused experiments to increase in number, and to increase in percentage of the pipeline value.”
Both experimental and ‘big bet’ innovations will also adhere to the company’s environmental, social and corporate responsibility goals, which Quincey said are an integral component of the business and influence everything Coca-Cola does.