Coca-Cola Energy axed in the U.S. after sluggish sales
The Coca-Cola Co. has confirmed that, just one and a half years after its introduction in North America and millions of dollars in brand-specific ad spending, it is discontinuing its cola-flavored energy drink in the U.S. and Canada, Beverage Digest reports.
First rolling out on domestic shelves in January 2020, Coca-Cola Energy—which had already been available in two dozen international markets since its wide launch the previous year—had the hard luck of trying to make inroads with customers just as the COVID-19 pandemic was beginning and Americans were buying up familiar “essential” products en masse.
That set a vicious cycle in motion for the product, which came in regular and zero-calorie versions, as well as a cherry flavor that was exclusive to the U.S. market. With consumers focused on other beverages, retailers canceled orders for Coca-Cola Energy or reconfigured stores to put the top-selling essentials front and center. The early drop-off in convenience store traffic, which then accounted for 70% of energy drink sales in the U.S., dealt another blow to the product’s chances of survival.
“As we emerge stronger from the pandemic, our strategy is focused on scaling big bets across a streamlined portfolio and experimenting in an intelligent and disciplined manner,” said Coca-Cola in a statement, adding that “an important component to this strategy is the consistent and constant evaluation of what’s performing and what’s not. ”
With a suite of new products that have been outperforming Coca-Cola Energy, such as the beverage giant’s sparkling water line Aha and new Coca-Cola with Coffee, the company is sometimes faced with accepting that not everything in its growing portfolio can “get the traction required for further investment,” the statement continues.
“It is for that reason we’ve made the decision to discontinue Coca-Cola Energy in North America.”
In retail environments, Coca-Cola Energy closed out 2020 with less than 1% volume and dollar share of the U.S. energy drink category; but even as the pandemic began to improve earlier this year, sales of the energy drink did not, slumping more than 50% in the first quarter of 2021, Beverage Digest reports. The product will remain on sale in North America until its inventory is exhausted later this year.
However, despite the prominent withdrawal, the Coke-flavored energy drink will continue in select markets where it’s considered a “regional brand,” including some European countries, a company spokesperson confirmed to Beverage Digest.
The decision to axe Coca-Cola Energy comes after the Atlanta-based soda giant had funneled millions of ad dollars into it in the U.S.
Just a month after its launch, Coke even tapped Martin Scorsese and Jonah Hill to star in a glitzy Super Bowl ad for the product, as it took on the likes of Monster Energy and Red Bull, enlisting Wieden+Kennedy Portland to create a 60-second spot—worth about $10 million in airtime alone—to showcase it.
Coca-Cola isn’t completely out of the energy drink game, though. Well-selling Monster Energy, in which Coke has a stake via an investment and distribution agreement signed in 2015, saw a retail sales boost of almost 18% in the first quarter of this year.
While that surely comes as welcome news at Coke’s headquarters, the deal with Monster originally jeopardized the launch of Coca-Cola Energy itself, as Monster once sought to prevent the company from introducing a competing energy cola. Coke eventually won an arbitration case with the brand and was given the green light to continue selling Coca-Cola Energy and expand into new markets.