33JUL11 www.brandpackaging.com

With a portfolio of more than 500 brands offering more than 3,500 beverages, The Coca-Cola Co. has expanded greatly since it poured its fi rst Coke 125 years ago.

But even with this vast portfolio, Coca-Cola continues to search for the next ‘big thing,’ charging its Venturing and Emerging Brands team to do just that.

The goal is to make sure that Coca-Cola isn’t surprised by trends in the beverage marketplace, and to boost innovation efforts and fi nd high-potential growth brands, says Deryck van Rensburg, president and general manager of VEB, which is a dedicated operating unit of Coca-Cola North America.

“This is extremely important to the company’s overall vision and strategy,” he says. “In the four years since the VEB team was formed, we have created a portfolio of brands developed by external entrepreneurs, imported to the US and crafted from scratch.”

For instance, VEB has entered into a global joint venture with an Italian company to create illy issimo, a high-end espresso in a can. It has also borrowed from its operations in France to sponsor Cascal, a naturally fermented soda in f lavors like black currant and cherry; and Japan, where

it repurposed the Japanese Sokenbicha tea brand, along with its marketing and packaging, to appeal to the US consumer. It also has an equity stake in ZICO coconut water and has fully acquired Fuze and NOS, which were incubated to scale and then graduated to the company’s core business units. In March, Coca-Cola fully acquired Honest Tea, which completes a transaction that began three years ago, led by the VEB unit, when the company purchased a minority stake in the company.

Spotting brands like these involves research. VEB team members are active in the marketplace and in absorbing consumer needs and demands.

HOTBRANDS

{NICHE}By Jessica Jacobsen

+ Coca-Cola's Venturing and Emerging Brands team fully acquired Honest Tea in March. The unit seeks out niche brands with high-growth potential.

bicha ng

UStakeully

Cola

annit,

active ng

h.ds

COKE’S VENTURING AND EMERGING BRANDS TEAM SCANS THE GLOBE FOR BRANDS WITH THE POTENTIAL TO BECOME THE ‘NEXT BIG THING’

BP0711_Coke.indd 33 7/5/11 1:38 PM

www.brandpackaging.com JUL1132

Innovation is clearly based on consumer realities, says Guy Wollaert, Coca-Cola’s senior vice president and chief technical offi cer, who has roles covering research and development, science, global product quality and integrity and supply chain functions.

“First and foremost, in everything we do, is making sure that we excel in sensory delight,” Wollaert says. “Taste is king and, of course, taste is a captive word for aroma and other aspects of sensory platform.”

Innovation also centers on worldwide trends toward natural products as well as wellness and nutrition. Wollaert says the company is on pace to transform products to remove artifi cial ingredients and preservatives.

And, of course, it’s all impacted by sustainability, in which goals range from packaging innovations to plant efficiencies, Wollaert says.

“Innovation in terms of our package portfolio and our availability strategy makes sure that we have the right package in the right place, [geared] to the right consumer needs in the right way,” he says. “It requires also a lot of exploration of new technologies on how we do consumer interfacing as well as technologies related to new packaging and base science of new packaging material.”

The company also looks to innovate around its methods of connecting with consumers, Wollaert says. The company is considering how to best leverage global trends of connectivity, mobility and social media — a large focus for the company’s marketing team, he says.

As The Coca-Cola Co. considers all these trends and strategies and continues momentum toward its 2020 Vision, Muhtar Kent keeps the lessons the company has learned in its 125 years in business top of mind.

“Arrogance is what almost brought us down in the 1990s — being away from markets, not touching the consumer, not understanding the consumer,” he says. “That’s what keeps me awake, because you can easily get mesmerized by the portfolio of wonderful brands that we have. Today, the consumer needs to be understood even better than any time before. We have to earn the trust of our consumers every single day.”

Kent insists that achieving the goals set forth is not going to be easy, “It is not for the people who have a faint heart,” he says, “But is it achievable? The answer is absolutely yes.” BP

The Coca-Cola brand also has a role in helping the company build its broader portfolio. Coca-Cola’s business was based on one product in one package until 1955, when it launched a king-sized package. Soon after it began expanding into new beverage offerings.Today, its portfolio includes 3,500 beverages throughout the world.

“One of the true strategic advantages of a truly global system, such as this one, is transfer of knowledge,” says John Farrell, the company’s vice president and chief strategy offi cer. “So as you’re having a great product or a good consumer proposition, the faster you can transfer it to other countries around the world, the greater your opportunities are.”

A recent example is the international success of Minute Maid Pulpy, a juice drink that features added fruit pulp. The beverage launched in 2005 in China, where the local preference is for pulp. The brand is now available on three continents in 18 geographies and has been designed to appeal to local taste profi les in each market. In 2010, the pulp-enriched juice product was introduced in Algeria, Malaysia, Singapore and Vietnam, and in Kazakhstan as Piko Pulpy and Mexico as Valle Pulpy. The global expansion resulted in Pulpy joining Coca-Cola’s roster of billion dollar brands.

Jennifer Zegler is the editor of Beverage Industry, www.bevindustry.com. Follow Beverage Industry on Twitter, www.twitter.com/beverageind.

+ Coca-Cola headquarters is illuminated against the Atlanta skyline in celebration of the company's 125th anniversary in May. The display was the world's largest single-building illumination, covering more than 210,000 sq. ft. Visual design/projection: Obscura Digital. Photo credit: Michael Pugh.

BP0711_Coke.indd 32 7/5/11 1:38 PM

www.brandpackaging.com JUL1134

“The most important part of the process is being in the market and networking with cultural leaders, wellness experts and early adopter consumers,” says van Rensburg. “We have to be real-time in the market, staying close to the consumer, watching what they do, where they shop and what trends they are following.”

VEB also gets inspiration from new entries in retail channels. “We have a group that, each month, visits an urban environment, goes to stores, engages retailers and collects all of the products that have been launched in that city,” van Rensburg says. “We research each brand—because every brand starts small before it becomes big.”

The company also attends trade shows, particularly for natural products, which is what drove the company’s interest in Honest Tea.

“The consistently strong growth of Honest Tea, as well as its leadership in the natural foods channel, was among the many elements that attracted The Coca-Cola Company,” van Rensburg says. “When we made the investment in Honest Tea, we did so because we saw that it had great potential to be a signifi cant brand of the future.”

Seth Goldman, co-founder, president and “TeaEO” of Honest Tea, says that the company has already realized tremendous growth with the support of Coca-Cola. He says that, when Honest Tea first began its deal with Coca-Cola, its products were available in 15,000 accounts, but, now, its accounts have grown to 75,000 and the brand is on its way to 100,000.

+ Led by its VEB unit, Coca-Cola purchased a minority stake in ZICO coconut water in 2007.

“I think the reason that Coke

invested [in Honest Tea] is

we’re really at the center

where a lot of the trends

are, with healthier products

[and] environmentally

friendly products.”

BP0711_Coke.indd 34 7/5/11 1:38 PM

35JUL11 www.brandpackaging.com

Jessica Jacobsen is managing editor of Beverage Industry, www.bevindustry.com. Follow Beverage Industry on Twitter at www.twitter.com/beverageind.

“I think the reason that Coke invested [in Honest Tea] is we’re really at the center where a lot of the trends are, with healthier products [and] environmentally friendly products,” Goldman says. “We expect to continue to grow aggressively in the years ahead.”

But the value of being part of Coca-Cola’s VEB business unit expands beyond distribution.

“We bring a great deal of passion, entrepreneurial energy, [and]a great deal of knowledge on a natural foods industry,” says Goldman, “but for a lot of our team there [are] so many new dimensions that we don’t have expertise in.”

Goldman says he expects that Honest Tea will benefi t from Coca-Cola’s depth in marketing and with packaging, such as the company’s bio-based PlantBottle.

“We’re very excited to have access to that kind of technology,” says Goldman. “That’s something we never would get on our own operating out of our little office in Bethesda, Maryland.”

But, what stands out most for Goldman, now that his company is fully part of Coca-Cola? He says it’s the company’s commitment to Honest Tea’s brand, quality and authenticity.

“I appreciate that Coke saw value in our team and our leadership and what we were doing,” he says. “They really have continued to invest in us and our management.”

VEB also appreciates lessons learned from its investments and acquisitions, such as the natural sales channel force that accompanies Honest Tea.

“When Honest Tea was fi rst created, the management team knew they needed to get their product to the natural channel,” van Rensburg says. “VEB is now able to leverage this industry-leading sales team to sell current VEB brands as well.”

Van Rensburg says all of these efforts refl ect why VEB has chosen to invest in entrepreneurs like the team at Honest Tea. “They provide a source of innovative ideas and energy that enhance our own,” he says. BP

+ Coca-Cola's VEB unit partnered with Italian coffee company illycafe to launch illy issimo, a line of ready-to-drink coffee beverages.

EDITOR’S NOTE:

These features were adapted from Beverage Industry's Coca-Cola 125th Anniversary coverage in June 2011

BP0711_Coke.indd 35 7/5/11 1:38 PM

www.brandpackaging.com JUL1134

“The most important part of the process is being in the market and networking with cultural leaders, wellness experts and early adopter consumers,” says van Rensburg. “We have to be real-time in the market, staying close to the consumer, watching what they do, where they shop and what trends they are following.”

VEB also gets inspiration from new entries in retail channels. “We have a group that, each month, visits an urban environment, goes to stores, engages retailers and collects all of the products that have been launched in that city,” van Rensburg says. “We research each brand—because every brand starts small before it becomes big.”

The company also attends trade shows, particularly for natural products, which is what drove the company’s interest in Honest Tea.

“The consistently strong growth of Honest Tea, as well as its leadership in the natural foods channel, was among the many elements that attracted The Coca-Cola Company,” van Rensburg says. “When we made the investment in Honest Tea, we did so because we saw that it had great potential to be a signifi cant brand of the future.”

Seth Goldman, co-founder, president and “TeaEO” of Honest Tea, says that the company has already realized tremendous growth with the support of Coca-Cola. He says that, when Honest Tea first began its deal with Coca-Cola, its products were available in 15,000 accounts, but, now, its accounts have grown to 75,000 and the brand is on its way to 100,000.

+ Led by its VEB unit, Coca-Cola purchased a minority stake in ZICO coconut water in 2007.

“I think the reason that Coke

invested [in Honest Tea] is

we’re really at the center

where a lot of the trends

are, with healthier products

[and] environmentally

friendly products.”

BP0711_Coke.indd 34 7/5/11 1:38 PM

Copyright of Brand Packaging is the property of Ascend Media and its content may not be copied or emailed to

multiple sites or posted to a listserv without the copyright holder's express written permission. However, users

may print, download, or email articles for individual use.