Click the image for details. Coca-Cola has been with people for many years. In various happy scenarios, Coke is an essential beverage, and some jokingly call it "happy water for couch potatoes." For a long time, the classic Coke's taste has remained unchanged, and its packaging has barely changed. However, this classic product is about to launch a new flavor. According to reports, Coca-Cola will launch a new flavor on February 25—Orange Vanilla. The packaging of this new flavor adds orange elements to the classic red can, and it will be available in both regular and zero-sugar versions. This is Coca-Cola's first official new flavor in over a decade; the most recent prior launch was the re-release of Vanilla Coke in 2007. So, why launch this new Coke product? Unique taste, freshness to stimulate sales After ten years, Coca-Cola finally officially launches a new flavor, mainly for the following reasons. First, the unique taste and limited-time release have good effects. Previously, Coca-Cola tried launching some "imaginative" flavors, such as avocado, sourdough, cucumber, etc., which consumers completely rejected, so they became short-term products. This time, the new classic Coke product was positioned as a long-term product from the start, so the taste control was very well done. Coca-Cola stated that in the new flavor experiments, they also tested raspberry, lemon, and ginger flavors. These flavored Cokes received good responses in some Asian countries, but according to consumer surveys, the most popular was the combination of orange and vanilla, with some consumers saying the flavor was "unique." Earlier, Orange Vanilla was released in limited quantities in Canada, and Australia also launched an orange-flavored zero-sugar Coke last summer, both with very good responses. Second, create freshness to stimulate sales. The new Orange Vanilla flavor is mainly to meet the needs of consumers seeking personalized tastes. We know that no matter how good a drink tastes, drinking too much can easily make you tired of it. New products launched by merchants can trigger people's curiosity to try something new. If the positioning and taste of the new product are ideal, it can effectively stimulate sales. For example, McDonald's has been continuously launching new products alongside its regular offerings for years. In the past year, there have been the so-called "first bucket of 2019" Golden Arches Bucket, loquat and pear pie for autumn and winter, and the Minions-themed molten cheese pork chop burger. These continuously launched products, on one hand, maintain freshness, and on the other hand, if customers surprisingly like them, they can also be converted into regular products, just like the classic Grilled Chicken Burger. Aggressive new launch, can it really sell well? So, after actual sales begin, what will the sales volume of this new Coke product be like? To answer this question, we can first look at Coca-Cola's previous brand upgrade of Diet Coke. In January 2018, Diet Coke underwent a thorough upgrade: the can became taller and slimmer, colors became more vibrant, and four new flavors were added: Lime Ginger, Cherry, Blood Orange, and Mango. This measure effectively boosted Diet Coke's sales last year. According to Coca-Cola's financial report, Diet Coke achieved double-digit sales growth in the third quarter of 2018. Coca-Cola stated that "the new bottle design and new flavors, to a large extent, gave young people a sense of integration." This shows that brand upgrades and new flavors can produce good results. However, this does not mean the same conclusion can be applied to classic Coke, after all, there is a precedent. In 1985, Coca-Cola changed the formula of classic Coke. In blind tests, almost everyone preferred the taste of the new formula, but when New Coke was officially launched, Coke suffered a massive sales decline. This is because classic Coke has been firmly positioned in consumers' minds; even if the taste is not as good as New Coke, consumers' psychological recognition will prompt them to maintain their love for classic Coke. Fortunately, this time Coca-Cola learned its lesson. Another reason for the failure of New Coke was that the company wanted New Coke to completely replace classic Coke, which had a huge psychological impact on consumers and led to resistance. This time, Coca-Cola particularly emphasizes: Orange Vanilla Coke is a complement to classic Coke, not a replacement. In Coca-Cola's promotion, it also mentioned that young people will not give up the classic taste because of this new product. In summary, this new Coke product should give consumers a fresh feeling and also promote sales, but as a complementary product, the final sales growth will be very limited. Behind the new Coke Is the company's sales weakness dilemma Coca-Cola's launch of this new product is likely related to the company's weak sales. According to Coca-Cola's annual financial reports, the revenue growth rates for 2015-2017 were -10.09%, -1.17%, and 9.29%, while net profit growth rates declined even more significantly during the same period. Additionally, according to institutional assessments, Coca-Cola's brand value decreased by 5% year-on-year in 2018. Behind the performance decline, there are mainly two reasons. First, consumers' health awareness has increased. With further economic development, the number of middle-class people has increased significantly, and people's requirements for quality of life have become higher, leading to greater attention to health. We can feel this health awareness around us. For example, topics like consumption upgrade and health preservation are receiving increasing attention. In contrast, soft drinks like Coke mostly contain sugar and coloring, and frequent consumption can easily lead to obesity and affect health. So it is not surprising that sales of such products decline. Second, industry competition is becoming increasingly fierce. In the soft drink industry, many other strong brands compete with Coke for market share. Besides the long-term rival Pepsi, there are also Red Bull, Monster, Dr Pepper, etc. According to the 2018 global ranking of the most valuable soft drink brands, the latter three saw annual brand value increases of 13%, 31%, and 30%, respectively, leaving Coca-Cola behind. Fierce competition, although not enough to defeat Coca-Cola, will inevitably lead to a decline in its market share and stagnant growth. So, for Coca-Cola, how should it ensure growth? The main way is to promote a total beverage strategy. That is, through acquisitions, bring some promising consumer beverage brands under its umbrella, inject resources, help them grow rapidly, and thereby drive the entire group's performance growth. In fact, Coca-Cola has also expressed such strategic intentions. Coca-Cola's President and CEO James Quincey once said that Coca-Cola is becoming a consumer-centric total beverage company. In specific actions, Coca-Cola has already begun to advance its M&A strategy. In the third quarter of 2018, Coca-Cola announced the acquisition of Costa Coffee, which means entering the hot beverage market worth $500 billion. It is reported that Costa will help Coca-Cola build a global coffee platform and will also provide Coca-Cola with channels for procurement, sales, and distribution. Not only that, Coca-Cola also acquired Nigerian juice brand Chi, kombucha brand Mojo, and American local old carbonated drink brand Moxie, among others. From this, it can be seen that Coca-Cola, the beverage hegemon, still has the ambition to continue its legend. As consumers, we can drink Coke and watch the show, silently cheering for Coca-Cola. Source: Marketing First Page (ID: mkt2000) New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 16 to March 18. This conference will focus on the topic of "Breaking the Game" and conduct in-depth discussions with many brand owners, supply chain service providers, distributors, and retailers. Compared to previous conferences, this summit will be fully upgraded. In addition to the original topics such as channel innovation, city distribution logistics, and distributor transformation, it will also add multiple parallel forums on new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail. Through three days of ten high-density, high-quality expert sharing and exchanges, we believe every brand owner and distributor can learn the latest business models, expert opinions, and practical methods, finding new tools and methods to break the game in 2019 and return to the track of rapid growth. Review of Previous Conferences -END-