Coca-Cola shows no signs of slowing down
It has been quite a year for Coca-Cola. In just the last month the company has launched a new energy drink, Coke Energy, and water brand, Aquarius, in the UK.
That’s just a snapshot of the rapid innovation taking place at the global drinks giant and CEO James Quincey is clear there are no plans to slow that down.
Speaking to investors this week, Quincey promised that a ready-to-drink Costa product is imminent. He said constant innovation is “crucial for sustained growth” and that “blurring category lines” is allowing the company to innovate in different areas.
It is all part of Quincey’s vision for Coke to become a ‘total beverage company’. But what does this actually mean?
Coke breaks down brands into leaders, challengers and explorers – each with different marketing strategies and goals.
Leaders are brands at the top of their category, like Coca-Cola, which need large marketing campaigns to maintain relevancy.
Meanwhile, challengers are, unsurprisingly, middle brands attempting to challenge big brands for the top spot, and explorers are those attempting to branch out into new occasions and areas.
According to Quincey, half of its explorer brands are growing in double digits, up from a third last year.
These are the brands that will help the company to thrive as consumer habits change and where the future of Coke and its total beverage vision lies. MF
Marlboro moves into life insurance
In a weird turn of events, this week tobacco giant Philip Morris, which is mostly known for selling Marlboro cigarettes, announced its foray into the life insurance space.
But not just any old life insurance: this is life insurance for ex-smokers. And it’s cheap, starting from only a fiver. It is offering discounts too, depending on whether you switch to one of its vaping products or not. Better still, if you quit smoking for a year you might get a 50% discount on premiums. (We are still not quite sure how this will be determined. Blood tests? Breathalisers? The Philip Morris smoking police?)
While it is a smart business move and follows the general trend that people are smoking less and vaping more, we are sure the irony isn’t lost on Philip Morris either.
It has sold tobacco products, caused cancer and played a hand in making smoking the leading cause of preventable death for almost two centuries. And now it wants people to pay it to insure their lives.
The new biz isn’t trading as Philip Morris though. In fact, ‘Reviti’ looks like any other independent London-based startup and a separate brand entirely. This will work in its favour if people don’t put two and two together.
It will be interesting to see how Reviti is marketed. Will there be any synergies or crossovers with Philip Morris’s own marketing and brand strategies? Will their marketing teams work together?
This is something Marketing Week will be looking to reveal in due course. EH
The end of ‘Sasda’
Well. That’s the end of that then. After a year of deliberation, the Competition and Markets Authority (CMA) has decided that Sainsbury’s and Asda must exist as separate entities.
The competition watchdog concluded that a mega-merger between the two, which would have created a new supermarket leader in the UK, would leave shoppers “worse off” due to increased prices in store and online.
It said there would be a reduction in the quality and range of products available and deliver a poorer overall shopping experience.
In response to the ruling, Sainsbury’s boss Mike Coupe said the CMA is “effectively taking £1bn out of customers’ pockets”, adding that the specific reason for wanting to merge was to offer lower prices for customers.
Meanwhile, the boss of Asda’s parent company Walmart, Judith McKenna, said while they are disappointed with the ruling, “the focus now is continuing to position Asda as a strong retailer delivering for customers” and that Walmart “will ensure Asda has the resources it needs to achieve that”.
Because of its clear value proposition, Asda is arguably in a stronger position than Sainsbury’s following the ruling.
While Sainsbury’s says it is still confident in its strategy, it will now need to re-establish its position in an ever competitive market where it sits somewhere in the middle – neither a discounter nor a premium grocer.
Will Sainsbury’s increase its focus on price? Value? Quality? Will it look to play up to the heritage of its brand? We will have to wait and see. EH
Shell pivots and moves toward renewables with Shell Energy rebrand
For a global oil and gas giant the decision to move into the renewables market with the desire to offer UK homes an eco-friendly alternative seems like one giant contradiction.
Apparently not, according to Shell, which acquired First Utility in 2018 before rebranding it as ‘Shell Energy’ last month. Shell Energy has now unveiled its first marketing campaign since the rebrand, with the intention of leveraging the strength of the Shell name while keeping its challenger status.
Again, this seems a little contradictory.
However, Shell Energy’s chief commercial officer, Ed Kamm, is eager to make sure consumers understand that “we’re not Shell, we are Shell Energy”. This is a big task, made even more difficult by one five letter word in particular – Shell.
“We are tapping into some of the things Shell is doing. But at the same time keeping us an independent, adaptable and flexible business,” he said.
Shell Energy is keen to communicate its independence by telling its renewable energy story via the new TV campaign which features an inquisitive young girl who, while holding a string of fairy lights, questions her parents about where electricity comes from.
Kamm said it’s hard to tell whether the move has been well received by consumers but that the company is looking at the long term not the short term and wants the marketplace to judge Shell over time.
Considering 59% of Brits say they want to power their homes with electricity from renewable energy sources, perhaps it’s not such a bad move after all. EL
P&G grooming sales down following #MeToo ad backlash
Earlier this year Gillette hit the headlines with its divisive campaign, ‘The best men can be’, which showed a compilation of men doing things often associated with toxic masculinity and examples of how men can take action to create meaningful change.
With references to bullying and the #MeToo movement, the ad split opinion and consumer perceptions of the brand took a hit.
It doesn’t seem to have done any favours for parent company Procter & Gamble’s grooming sales either, which were down 1% in its third quarter results, released this week.
However, in spite of the category’s continued poor performance and increased competition in the wider grooming market, P&G still sees opportunities to invest and grow, and P&G said while it isn’t where it wants to be in terms of growth, the results are “not a disaster by any means”.
Perhaps not a disaster, no. But taking into account ongoing sales declines and a knock to consumer perceptions of the Gillette brand, things could definitely be better.
In a competitive grooming market, it looks like P&G is testing the water for new revenue streams – in particular with its new product for sensitive skin, Skinguard, which it believes can bring men back into the category who have stopped shaving due to irritation.
“Where we find smart opportunities to invest, we are going to invest,” P&G’s CFO Jon Moeller said on its investor call. “We really believe in these categories where performance drives brand choice we need to be superior and we are very determined to deliver that.
“That doesn’t mean we’re going to do super things, we are very focused on return. But we know superiority delivers return in categories.”
In the case of Gillette, it might be smart for P&G to leave its days of ‘social purpose’ behind. EH
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