Coke: More with less

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Coca-Cola is finding good things come in small packages-higher prices and better profits.

Earlier this month, the Coca-Cola Bottling Co. of New York began replacing 2-liter bottles with contour-shaped 1.5-liter bottles called Smooth Serve for 26 brands including Diet Coke, Sprite and Vanilla Coke. The new bottles allow one-handed pouring-and a double-digit price increase.The bottles originated in Europe and are being sold in the greater New York area as a pilot program, said Brian Wynne, VP-general manager for the unit of Coca-Cola Enterprises that serves the metro area. He added that "2-liter bottles have been declining in the past few years, and that was one of the motivations to find a better big bottle." While retailers determine pricing locally, the per-ounce cost, even on the low range of sale prices, is about 1.7¢ for the 1.5-liter bottle while the 2-liter bottle is 1.5¢ per ounce. That's a 13% price increase. At full price, the cost per ounce of a 1.5-liter bottle is about 2.5¢ vs. the 2-liter bottle's 2.2¢. That's a 15% increase.

It's still cheaper than smaller containers. Mr. Wynne said the mini 8-ounce cans typically pull two to three times the cost per ounce for the same product in a 2-liter bottle.

"Our goal is not to sell more fluid ounces," he said. "It's to satisfy more consumer thirst occasions. If today a consumer didn't buy our brand because we didn't have a package that met their need, that's a totally lost consumption occasion."

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