Coca-Cola betting big on Zero Sugar

by Monica Watrous
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Coca-Cola Zero Sugar
Coca-Cola Zero Sugar, a no-calorie soft drink the company describes as “the new and improved Coca-Cola Zero," is set to debut in August.
 

ATLANTA — Slated for a U.S. debut in August is Coca-Cola Zero Sugar, a no-calorie soft drink the company describes as “the new and improved Coca-Cola Zero.” Consumer testing of the new recipe took over a year, and the beverage now features an “even more Coke-like taste,” said James Robert B. Quincey, president and chief executive officer of the Coca-Cola Co.

James Quincy, The Coca-Cola Co.
James Quincey, president and c.e.o. of the Coca-Cola Co.

“This product has demonstrated strong consumer appeal in Europe, Mexico and other markets, resulting in double-digit global volume growth for the brand year-to-date,” Mr. Quincey said during a July 26 earnings call with investment analysts. “So, we will continue to roll this new and improved product out across key markets, including the U.S., supported by substantial marketing and media support.”

Coca-Cola Zero launched in 2005 and is sold in nearly 160 countries around the world. Along with the new formulation, Coca-Cola Zero Sugar will feature an updated package design that supports the company’s “One Brand” strategy of uniting its Coca-Cola portfolio of beverages under a single trademark.

“Coke Zero Sugar, of course, is an improved version of the Coke Zero Sugar formula, but it comes in more of a red visual identity, more of a red can with more of a red label and will actually help people stay in the Coca-Cola franchise, and whether they want the original with sugar or they want a Coke Zero Sugar without any, and it’s less switching between brands, which will ultimately help us keep and attract more consumers,” Mr. Quincey said.

Coca-Cola beverages
Coca-Cola Zero Sugar will feature an updated package design that supports the company’s “One Brand” strategy.
 

The introduction also underscores the company’s continued efforts to provide more low- and no-sugar options. The company now offers nearly 250 such options in the United States.

The new offering is expected to be “a growing and important part of our portfolio,” Mr. Quincey said.

Net income attributable to shareowners of the Coca-Cola Co. in the second quarter ended June 30 was $1,371 million, equal to 32c per share, down 60% from $3,448 million, or 79c, in the year-ago period. Results included charges recorded in the recent quarter related to asset impairments, restructuring and productivity and reinvestment initiatives.

Net operating revenues of $9,702 million declined 16% from $11,539 million. Excluding the impacts of ongoing refranchising of bottling territories and foreign currency exchange, organic revenues increased 3%, largely driven by innovation in sparkling soft drinks, Mr. Quincey said.

Coca-Cola Zero Sugar
The Coca-Cola Co. now offers nearly 250 low- and no-sugar options in the United States.
 

“In North America, improving performance in our refranchised territories, with a disciplined approach to volume, price and mix management and some favorable timing of shipments in our food service business, led to an organic revenue growth of 5%,” he said.

The company’s recently announced efforts to implement a more streamlined operating model are on track, he added. Part of that initiative includes a reduction in corporate workforce by 1,200 starting later this year and into 2018.

“Much of the organizational design work we outlined earlier this year is now complete, and we are rapidly implementing our new corporate structure to support faster growth,” Mr. Quincey said. “While these large-scale changes are never easy, our associates understand the need for our company to adapt, and I am very encouraged by how well the organization is embracing the transformation.”

He added, “Our system has proven that it is taking the right actions to be successful in the market. And going forward, we will remain relentless in becoming more efficient, leaner, more agile while continuing to expand our portfolio, therefore, building a strong position for future growth.”
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