Coke Grows Juice Brands Globally With Focus on Commonality

Iain McLaughlin on How Beverage Giant Managed to Avoid the Pitfalls of Packaging Revamps

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Iain McLaughlin

The marketing annals are littered with logo and packaging revamps gone bad -- Tropicana, Gap and SunChips, to name a few -- so when Coca-Cola set out to overhaul its juice packaging around the world, one could be forgiven for wondering whether it was the best idea. Eighteen months later, Iain McLaughlin, general manager of Coca-Cola's Global Juice Center, said the rollout is on track and widely accepted by both consumers and the company's local teams.

"We're always cautious, given the value of the brands. Del Valle recently announced it was a billion-dollar brand, so given the value of those assets, we're very careful to make sure we understand what we're doing as we transition," said Mr. McLaughlin, who joined Coca-Cola in 1998 and has held global posts with responsibilities related to Europe, Eurasia, the Middle East and Africa.

The shift to a common look among its juice brands, from Minute Maid in the U.S. to Cappy in Germany to Cepita in Argentina, allows the world's largest juice company to share resources in areas such as shopper marketing and advertising while retaining strong local brand names. It will be a key advantage as Coca-Cola looks to build its burgeoning juice business, which already counts 1,100 products across 100 brands.

To grow, Mr. McLaughlin said the company will look to both acquisitions -- the U.K. Innocent smoothie and Latin American Del Valle brands have proved the company's adeptness at quickly scaling acquired brands -- and innovation.

Ad Age : Why was new packaging needed?

Mr. McLaughlin: Given our size and scale -- we sell juice and juice drinks in 145 countries around the world -- one of the key things we can do to drive the business is leverage that global scale. When we looked at the portfolio we had and thought about how we were going to take it to the next level, there was clearly an opportunity to move to a common look and feel. We still allow for regional flexibility where it's necessary. We need that flexibility [because] juice, unlike sparkling, varies considerably from region to region, in terms of flavor preference. If you look at the U.S., it's very much about orange juice. If you look at Russia, apple juice is the leading flavor. In Turkey, peach would be the leading flavor. So one size fits all, of course, doesn't work. But moving to one look and feel and combining that with what we call a master brand strategy gives us an opportunity to leverage our scale and our worldwide reach in a way that is efficient. [It allows us to] do better-quality marketing and advertising, which travels over a larger geography vs. what we had, which was a fragmented portfolio with many different looks around the world.

Ad Age : How is it playing out, when it comes to advertising and marketing?

Mr. McLaughlin: We'll be in the vast majority of countries by the end of 2011. What it enables us to do, if you consider shopper marketing, for example, [is ] leverage the learning we have globally. It helps the markets by designing a set of tools they can use locally, adapting to local language requirements and local occasions for juice drinking. In terms of advertising, specifically, that is something that we continue to look at and are working on. … Juice has a very different meaning and a very different flavor profile around the world. Therefore getting to the Coke way of leveraging global scale is a long way off. But, clearly, we can go to fewer advertising approaches, which are actually stronger as opposed to having each market with its own advertising campaign.

Ad Age : Four of Coca-Cola's 15 billion-dollar brands are in the juice category. What's next?

Mr. McLaughlin: Innocent, which is part of our portfolio in Europe, we see as a platform that has the potential to become a billion-dollar brand.

Ad Age : How important are acquisitions?

Mr. McLaughlin: What we've demonstrated in juice is not only can we acquire brands, but we can very quickly integrate them into the global system in a way that works and in a way that we can really bring benefit to the brands we acquire by accelerating their growth. Innocent is a clear example. Del Valle is another one.

Ad Age : The Chinese government turned down your $2.4 billion acquisition of China Huiyuan Juice Group in 2009. How are you approaching China?

Mr. McLaughlin: The reality is that without the acquisition in China we have continued to grow in a very consistent way with Minute Maid Pulpy. Of course the acquisition would have been a benefit to the portfolio, but the reality is that the China market offers so much potential.

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