Life doesn't taste good at Coca-Cola

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The heat's on Coca-Cola Co. and its "Life Tastes Good" campaign as sales growth of the company's flagship withers well below that of Pepsi-Cola Co. at the start of the crucial summer season.

Coca-Cola Classic volume in supermarkets slumped 6.5% for the four weeks ended June 17, according to Sanford C. Bernstein figures, a stark contrast to the 2.3% gain registered for the comparable period in 2000. The recent four-week percentage decline was nearly double that of Pepsi's base brand, which saw volume drop 3.3% amid a tough start to the season, with total carbonated beverage sales down 2% for the period.

Some blame Coke's three-month-old "Life Tastes Good" effort from Interpublic Group of Cos.' McCann-Erickson Worldwide, New York, which is working with other Interpublic shops on new executions for fall. "Summer is upon us, and [Life Tastes Good ads] are having no impact in the marketplace," a Coca-Cola insider said.

The Sanford Bernstein figures indicate Coke's volume decline is accelerating as the campaign progresses. Its data show that for the four weeks ended May 20-one month after the campaign broke-Coke volume was down 1.2%. Volume for flagship Pepsi was down by the same amount during that time, according to the figures, indicating its volume is falling less sharply.

Even Coca-Cola executives indicate the campaign that features concert-goers, a bride, surfers and rocker Jakob Dylan is off to an uneven start. One said the slice of life effort was improving and that "we've learned from the first phase." A company spokesman said executives and bottlers are pleased with the campaign's strategic direction, but he declined to comment on how specific executions were regarded, citing company policy. "Some were stronger than others," he added.

Sanford Bernstein analyst Bill Pecoriello said he believes the company must rejigger its ads for them to resonate with consumers. "This is important because they're a year and a half into the new [think local, act local strategy by CEO Douglas Daft], and we've been waiting to see the benefits," he said.

McCann referred calls to the company. John Sicher, editor of Beverage Digest, said there has been insufficient time to judge the campaign. "How well `Life Tastes Good' works won't be known until about a year from now," he said.

Measured spending figures for Coke since the "Life Tastes Good" ads broke are not available. The company spent $24.2 million on Coke Classic measured media during the first quarter of 2001, down from $42.5 million a year earlier, according to Taylor Nelson Sofres' CMR.

While talk circulates that Coca-Cola may be pulling back on airtime for the campaign to fund promotions such as its $1 million "Pop the Top" giveaway, that could not be confirmed. People familiar with the company said Coca-Cola generally pulls back on summer branding in favor of promotions. Such activities are a big priority for Coca-Cola, which recently pulled three of four spots by Bcom3 Group's Leo Burnett USA, Chicago, and replaced them with work by McCann.

The agency was a primary beneficiary of Coca-Cola's December announcement that Interpublic would be the global marketing strategist for its $900 million account. Some, however, questioned what will happen if sales continue to struggle.

"Panic is setting in, and when that happens, you have to blame someone," the insider said.

Contributing: Kate MacArthur

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