Coca-Cola’s 2020 Vision for the Cold Vault

An extended look at how the beverage category will innovate and evolve

Published in CSP Daily News

Mel Landis

ATLANTA -- The cold vault in convenience stores has evolved exponentially over the years, and the evolution will continue with more variety, more options for consumers and more reasons to shop inside convenience stores, according to Coca-Cola Co.’s vision of the cooler for the year 2020.

“Within our 2020 vision, you’ve got some major platforms: How do you continue to build brands through things like innovation, digital, social, etc.?” Mel Landis, Coca-Cola Refreshments chief customer officer, told CSP Daily News in an exclusive interview. “You’ve also got all the work we have to do to develop the organization of the future. What does that look like, etc.?”

For retailers and consumers, the meat of the vision is “about what we would see in the categories through 2020,” Landis said, noting five major directions for Coca-Cola.

Packaging

“I think you will continue to see us diversify packaging. We’re not done,” Landis said, referring to the recent moves to 12.5- and 16-ounce bottles for carbonated soft drinks. “In some cases, it may even be different forms than it is today. It may be aluminum or glass. It could be a Freestyle [fountain] machine. It could be anything, but you’ll continue to see us diversify, whether in form or function or package. Diversity will become a bigger play.”

Innovation

Product innovation will continue and possibly speed up, Landis said. “That could be different categories, both still and sparkling,” he said, noting current product tests on a sweetener system for mid-calorie carbonated soft drinks, specifically Fanta Select and Sprite Select.

“We’re going to look at those as ways we may want to go. That’s consistent with our health-and-wellness message. We’ve got full-calorie, we’ve got no-cal, and we’ve got mid-cal options. And we want to have all those things.”

There will also be a focus on emerging categories, such as coffee drinks, protein drinks, coconut water and the like. “We’ve got some shared ownership now in a dairy business, which gives us access to the things that could be done in that space,” Landis noted.

Mobile & Digital

Outside the cold vault, Coca-Cola will consider ways to use technology to drive sales of its products.

“If Google Wallet were to take off, and you don’t actually go through a cash register anymore, how do you grab, pay and go?” Landis said. The beverage-maker is considering “the whole subject of how you use technology, how do you think about digital and social and mobile, connecting communities. How do you use that to make a consumer offer? All that is going to play a role in what the future will look like.”

Changing Consumer Base

As the Hispanic population grows in the United States, Coca-Cola will consider how to “make sure we’ve got the relevant brands, packs, offers, occasions for a continually diversifying population,” Landis said. “Brands like Fanta play into that, Coke from Mexico or other imported beverages.

“If we see something [that’s working in another country or culture], how do you bring that over” to the United States?

Health & Wellness

“We’ve got a great business right now in chilled juice. How do you expand that into more areas?” Landis asked. “Does it offer more opportunities to do more in the chilled space?”

Landis noted Coca-Cola Co.’s tiered offerings in the juice--Odwalla, Minute Maid and Simply--and tea--Gold Peak, Honest Tea and Fuze--segments that capitalize on the health-and-wellness movement.

“That whole chilled piece has a fresh connotation anyway,” he said. “So how do you build on that as part of making sure that your portfolio gives people options to make good choices about how they want to manage their lifestyle?”

As to what has Landis excited for the near future, he points to the Freestyle fountain machine, which dispenses more than 100 beverage brands, allowing for mixing as the consumer desires, and opportunities to work with retailers to develop beverage occasions.

“Freestyle is a game changer in terms of how the customer interacts with your product, the number of choices you give,” he said. “The role it could play with retailers to help them drive incremental purchases to make sure the transactions continue to grow, that really excites me.”

At the same time, Freestyle could direct Coca-Cola Co. in developing future packaged products.

“Each machine is set up wirelessly, so we can download information off it,” Landis said. “If you start to see certain trends happen, you can envision a day where you start to take some of those consumer learnings and eventually roll them into the packaged side at some point.”

Meanwhile, he noted that there is “a ton more we can do to help our convenience store customers drive incidents with bottled beverages and other occasions, primarily with meals and snacking.”

He noted that less than 20% of consumers buy a beverage and a snack or food in c-stores. He’d like to see that change.

“Think of the revenue we can drive for this industry if we got that up to 30%, 40%, 50%,” Landis said. “Think about if we could really create a destination where those folks that gas and go today viewed it as another option, like a QSR, where they would go to get an afternoon snack for the kids or ice cream in the afternoon. How do you do that?”

That’s the type of question Coca-Cola Co. hopes to answer in coming years.