Coke looks to Minute Maid

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Coca-Cola Co. lost out on Gatorade and SoBe. But it's counting on its Minute Maid operation to provide much-needed growth.

Central to Coke's strategy is a new effort to redefine its 40-year-old Minute Maid franchise as a health and wellness beverage company and to aggressively grow that business over the next year through a raft of innovation, acquisitions and marketing.

"In today's world, the health and wellness arena is the biggest opportunity for us outside of carbonated soft drinks, and Minute Maid is the anchor of that business," said Jay Gould, VP-innovation at Coke.

Minute Maid Co.'s consumer marketing budget will grow more than 10% in 2001 as the unit rolls out a variety of line extensions for its Minute Maid and Hi-C brands as well as newly created brands to support its new health and wellness platform, said Abby Rodgers, director of health and wellness for Coke in Houston. January through August Minute Maid spent $26 million on measured media, per Competitive Media Reporting.

Acquisitions or partnerships with existing health and wellness brands will also be crucial to growing the business, Mr. Gould said.

Coke had been involved in discussions to acquire both South Beach Beverage Co. and Gatorade marketer Quaker Oats Co., which ended up going to PepsiCo (see related story on this page). The acquisitions place increased pressure on Coke to battle its rivals new stronghold in non-carbonated beverages.

Coke will also look to invest heavily against building its presence in both "rejuvenation" beverages, such as coffees and teas, and in "hydration" beverages, such as waters, near-waters and sports drinks.

"Coke is gearing up for what I believe will be one of its most active periods in a long time for new product introductions," said John Sicher, editor of industry newsletter Beverage Digest. The reason, he said, is to adapt to the U.S. consumer's growing desire for a diversity of beverages beyond traditional choices.

Coke plans to develop products specifically designed to meet the needs of kids and their gatekeeper moms, the 20-to-40 active lifestyle set and baby boomers, Mr. Gould said.

At the heart of the kids effort, or what Coke dubs the "Keep them growing" group, are calcium-fortified products, which already make up over 50% of Minute Maid's orange-juice sales and one-third of orange-juice sales overall, according to Minute Maid research. Coke is now working with universities to develop additional products that support important health issues for kids, Ms. Rodgers said.

For the active set, or the "Keep me going" group, Coke plans to develop a slew of juice-based beverages, teas and lactic products that play to the top trends for the demographic, such as herbal ingredients and convenience.

Finally, for the 40-plus generation looking for beverages that "Keep me young," Coke will build on Minute Maid's existing roster of functional beverages, including a new Low-Acid Minute Maid Premium Orange Juice and one with Double Vitamin C, E and Zinc.

One planned introduction for 2001 is a smoothie-like whey-based juice drink called BeginIt that features protein, carbohydrates and vitamins that will be billed as "Breakfast in a minute." The line will launch midyear with several fruit flavors backed by ad support from Minute Maid's agency of record, Leo Burnett Worldwide, Chicago.

Coke and PepsiCo are nearly even in the overall fruit juice and fruit drink segments, with PepsiCo sales totaling $1.8 billion and Coke at $1.7 billion, according to Information Resources Inc. data.

PepsiCo leads the fast-growing refrigerated orange juice segment in supermarkets, with sales of its Tropicana beverages up 7.5% to $1.3 billion for a 41% share for the 52 weeks ended Nov. 5, per Information Resources Inc. Coke holds a 20% share of the category with Minute Maid, sales of which grew 9.1% to $611 million. Coke leads in the frozen juice and juice drink arena with sales of $288 million vs. PepsiCo's $61 million and in the shelf stable juice and juice drink arena, with sales of $620 million compared with PepsiCo's $165 million.

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