By Published on .

ATLANTA-Coca-Cola Co. put the soft-drink world on notice last week that it will take no prisoners in a newly aggressive war against private labels and all other competitors.

President-Chief Operating Officer Doug Ivester bared his teeth and literally played wolf calls during a keynote speech at the InterBev trade show in which he labeled store brand companies "parasites" and chided national brand marketers for acting like "sheep."

"Have we come to a place where we no longer know the difference between counterpunching and counterfeiting?" he asked.

Too many have responded to private-label growth by focusing on price, Mr. Ivester said. "If you abandon all of the other marketing tools available to you, if you let [store brands] lure you onto their turf, the best you can hope for is simple survival."

Coca-Cola no longer refers to private label in a spot by Creative Artists Agency, Beverly Hills, Calif., in which ice cubes wait in nervous anticipation and celebrate when Coke is poured on them. But with retailers, it's becoming more forceful in discussing store brands.

The soft-drink giant contends even though store brands offer greater margins to retailers, national brands can create more net profit because they deliver product directly to stores and manage the beverage aisle for the retailers, among other things.

Mr. Ivester's talk came as analysts show private-label cola volume decreases for the first time in more than a year.

Beverage Digest said private-label volume sales for soft drinks dropped 3% for the four weeks ended Sept. 4 compared with the year-earlier period.

Beverage Digest Editor Jesse Meyers called Mr. Ivester's speech "a defining moment we'll look back on and say, here's where Coca-Cola took off not only its gloves but its skin to say ... nothing's going to stop us. There's no question private label was a threat, but Coca-Cola has lined up its troops."

Even Pepsi-Cola Co. President-CEO Craig Weatherup approved of the speech. "I liked his parasite image; it's a totally apt analogy. Private label is still No. 1 on my list [of concerns]."

The best action Coca-Cola has taken has been breakthrough advertising and marketing focused on the company's trademark, said Tom Pirko, president of consultancy Bevmark, New York. "From the `Always' campaign to the return to the contoured bottle, Coke has gone back to its core and it's got the wind at its back. Ivester was driving this home and putting the industry on notice that they'll be picking up the pace."

Bottlers and others at the InterBev show (where record attendance brought out nearly 14,000 people and 600 exhibitors) suggested Coca-Cola will continue that focus in next year's ads. Diet Coke in January is expected to return its "Just for the taste of it" tagline in new spots from Lowe & Partners/SMS (AA, Sept. 12).

Pepsi-Cola, meanwhile, before yearend is expected to introduce ads from BBDO Worldwide, New York, that are significantly different from the current campaign.

"Coke will force Pepsi into better advertising," said Mr. Pirko. "I expect we'll see better advertising throughout the industry. We're just getting through a long period conditioned by economics and the recession. Advertising's going to become much more important again."

Most Popular
In this article: