Euromonitor International Senior Beverages Analyst, Howard Telford comments on four potential challenges for Coca-Cola ahead.
Low-calorie cola performance
With governments across the globe and media publicizing obesity concerns, sugar content in soft drinks has gone under increased scrutiny. While the Coca-Cola Co. has already developed low and zero calorie drinks that are top ranked brands in their respective categories, the overall category is anaemic in the US, reflecting concerns over alternative sweeteners. It will be interesting to see the performance report for Coca-Cola Life, which is the company's stevia sweetened cola.
Emerging market performance
While Coke dominates the emerging markets, it has seen increased competition from domestic players, with global competitors such as Pepsi Co. also looking to grow in these regions as well. If the company wants to hit its 2020 targets, BRIC growth and development of major secondary markets such as Indonesia and Vietnam are essential.
Health and wellness trends within the soft drink category
Coca-Cola already has a wide range of juice brands and waters that could be winners for the company, but they must continue to develop and innovate with new health and wellness angles within its brands. A key growth area could be functional and energy drinks. Besides the company's Monster Energy equity investment late last year, what other innovation plans do they have in-store?
Push other drink categories besides carbonates
As the popularity of carbonates has waned in traditional high-consumption markets, the public pressure to reduce sugar consumption via soft drinks will remain high. Coke will need to expand sales of other beverages and diversity its soft drinks category portfolio, including functional beverages and dairy. Fairlife, the company's new US milk product boasts 50 percent more protein and calcium with 30 percent less sugar and has a longer shelf life than regular milk. Fairlife aims to get a big share of the $20 billion dollar US drinking milk products market, up 5 percent in 2014. The big question is the strategic direction of the Fairlife brand and what Coke thinks of this opportunity.