HONG KONG (AdAgeChina.com) -- If you want a sneak peek at the next cool drink your ten-year-old will clamor for at the mall next year, take a look at what Asian kids are drinking at their local dai pai dong today.
Coca-Cola has looked to Japan for new ideas for years but newer Asian markets like China have also become hotbeds of innovation, particularly as Coke expands its portfolio with new water, juice, tea and coffee brands, even "gel" beverages.
As Coca-Cola's group marketing director, Pacific Group, Darren Marshall, 41, is exploring -- and exporting -- new products across Asia and even into Europe and North America.
A rising star, Mr. Marshall himself could become Coke's next Asian import to the U.S., in an international marketing role at its headquarters in Atlanta. The Canadian moved to Kuala Lumpur in 1998, as Coke's marketing director for Malaysia. He has held senior roles in Southeast Asia and later North Asia. Today, he oversees all marketing from Japan to Southeast Asia to Australia.
Late last month, he shared sandwiches and Cokes in his Hong Kong corner window office in Hong Kong's Causeway Bay district with Ad Age Asia Editor Normandy Madden to talk about the economy, the Olympics, Coke's Chinese medicine research center -- and those weird gel drinks.
Ad Age: How is your business in Asia?
Mr. Marshall: Asia has two billion consumers [who] drink our products relatively infrequently compared to other parts of the world. It's a huge opportunity with big populations, low category development, high economic growth, increasing affordability. It's the time and the place to develop lifelong habits.
Ad Age: Can big emerging markets help companies like Coke offset a slowdown in developed markets like the U.S.?
Mr. Marshall: It's not just the big BRIC countries. We've put a ton of focus on China but the other focus is, what's next? There are 250 million people in Indonesia, 85 million in Vietnam. These are huge populations that are really starting to take off. We have to build infrastructure in such markets, not only from system capability standpoint but with the right brands at the right time with the right messages.
Ad Age: Will Coke's proposed takeover of the Chinese juice giant Huiyuan be approved?
Mr. Marshall: I hope so. It's totally synergistic with our business. We have a strong juice business in China but our focus there is in juice drinks. Huiyuan brings 100% juices, nectars which we don't have much strength in.
Ad Age: Were the Olympics worth the investment?
Mr. Marshall: Our sponsorship wasn't about building brand awareness or convincing people Coke is a sponsor of the Olympics. We developed our Olympic program to inspire consumers to love our brand and teach them how to drink our brand. That's not something you can measure two days after the Olympics.
Ad Age: Do Asians still need education about Coke?
Mr. Marshall: Absolutely. It's a huge issue in all developing markets. We've had circumstances where people really loved the brand and knew what it stood for -- but never drank it and didn't understand it should be chilled. It's critical for us to teach people what the product is and when and where to drink it.
Ad Age: Interactive media seem increasingly important for Coke in Asia...
Mr. Marshall: Without question, Asia is a three-screen world -- TV, internet and mobile. TV will continue to be the pillar of what we do because ours is a mass business and continues to be the medium that reaches everyone quickly and efficiently.
That said, Asians are spending increasing time on the internet and using mobiles. We can't be so arrogant to assume everyone will flock to iCoke.com because consumers are going other places.
Ad Age: Such as?
Mr. Marshall: A couple of things we've done related to the Olympics in China are interesting. The torch relay touched hundreds of millions of consumers in China. Using interactive technology to run our torchbearer nomination scheme, we had over 300 million nominations.
Only a few people could carry the real torch though, so we had a virtual torch relay by partnering with [Chinese instant messaging leader] QQ. Through instant messaging, people could pass along a virtual torch icon. That reached 68 million people. We created an Olympic song that was downloaded over 348 million times and became a No. 1 hit on the charts, again through QQ and iCoke.
Ad Age: What are the latest Coke products coming out of Japan?
Mr. Marshall: There are always interesting things coming out of Japan. Georgia coffee, which has built critical mass and scale in Japan, was recently launched for the first time outside Japan, in South Korea and Singapore. We're turning it into a regional and perhaps global brand. Another example is [our sugarless, blended tea brand] Sokenbicha. We just launched that in Korea as well, and are looking at other markets.
Ad Age: What is Coke creating in Asia that the Western world hasn't seen?
Mr. Marshall: There are two things that I'm really excited about. One is beverages with bits. Minute Maid Pulpy, juice with added pulp, was designed in China. It's affordable and accessible with something unique and different. It is hugely successfully in China, consistently growing double-digits. This year we've expanded it to the Philippines and Indonesia. We've already launched it in Vietnam and Thailand and have plans for other places.
Another is Nestea with Aloe Pulp in Hong Kong. You know how many tea brands in this part of the world. This product gives a unique taste, refreshment and health experience and creates something really different. Note the commonality. Both started something added back to the product.
Ad Age: Would beverages with bits work in other markets like the U.S.?
Mr. Marshall: I'm North American and I quite like it! I think it's pretty cool and different. The second thing I'm excited about is the gel-based drink Fanta Furu Furu in Japan. It looks like a normal sparkling beverage but shake it a few times, it creates a gel texture. The orange and grape versions both topped the list of Japan's most successful product launches this year.
Ad Age: How do Coke brands cross borders?
Mr. Marshall: First, by understanding what drives people. Asians have different languages, cultures, religions. But in most cases, consumer motivations are very, very similar. If we're going to create efficiencies, we need to work together. This is Asia, so everything is built on relationships. Rather than have 30 countries create 30 platforms in 30 unique ways, we have one country build a platform for the broader group.
It also creates a sense of interdependence. For example, the Philippines has a "Coke with food" platform. Thailand has the development center focused on refreshment. The benefit of this structure is we're getting better work, faster, with less development cost.
Ad Age: Give us an example.
Mr. Marshall: China's development center created Minute Maid Pulpy. It's a really important brand that has built not only a lot of critical mass in China but a lot of critical understanding about how to launch the product. They are building work that will travel across the group.
Coke Zero came out of Australia and has been a huge success for our business globally. It created very big news there and taught the world from that case study how we could create a very large business out of the zero sugar platform. That has gone across many countries but across other categories.
Ad Age: What's behind the Chinese medicine research center in Beijing?
Mr. Marshall: Driving insights and benefits. Traditional Chinese medicine is a fundamental belief many consumers have about the balance between heating and cooling properties. Understanding this doesn't just lead to traditional Chinese medicine products. It helps us understand how to connect with people on our base business as well. Coca-Cola is a cooling type of beverage which doesn't go with cooling foods. It needs to be matched with "heaty" foods to achieve a perfect balance.
It also involves the balance of fun and function. Consumers in Asia have to have that balance. Just talking about the fun notion of an ice cold Coke is good but consumers have to understand what functional role it plays in their life as well. We have to communicate that in our communication, packaging, in the occasions we activate.
Ad Age: Healthworks in Hong Kong also relates to traditional Chinese medicine. Is there a growing trend in such drinks?
Mr. Marshall: Healthworks, an herbal tea brand, is a small business but it inspires a lot. It's all about modernizing traditional Chinese remedies grandmothers used to boil up in their kitchens. It has done quite well in Hong Kong and other Asian markets. There is more interest in eastern medicine outside Asia, so variations of the Healthworks brand will be exported to some countries in Europe and North America later this year.
Ad Age: Is Coke concerned about packaging waste in Asia?
Mr. Marshall: I don't want pictures of landfills filled with plastic Coke bottles. We're committed to making sure everything that goes into making our bottles is recyclable and making sure we're reusing the plastic. In places like Brazil, for example, all of our sales guys wear uniforms recycled from bottles.
Ad Age: What's your biggest mistake in Asia?
Mr. Marshall: We launched a product in Southeast Asia called Alive, a lifestyle isotonic beverage for fashionable 20-somethings -- water plus juice plus vitamins, lightly carbonated in a beautiful package that gripped your hand.
I loved it, but it sank like a rock. It wasn't simple enough. You couldn't describe it in 30 seconds. It was a new category and it was too elegant. It was a small niche product that would never get enough scale to be successful within our system.
But pieces of it ended up in other places. The packaging used on Bonaqua water was inspired by Alive. So was the Coca-Cola grip bottle in China. The product was reintroduced with a couple of modifications in Spain under the Sprite brand. You can learn from success as well as failure. Don't throw the baby out with the bath water.
Return to AdAgeChina, click here