Coca-Cola CEO: Renovation of existing products can be as impactful as innovation
Coca-Cola has innovated by creating long-lasting new products, renovating existing products, launching “novel” products, and designing new pack formats, all of which are “driving the business”, says CEO James Quincey.
Driving innovation around the taste of existing products can be as impactful as wholesale new products, says Coca-Cola CEO James Quincey.
The boss of the drinks company, which owns brands including Fanta and Sprite as well as Coca-Cola itself, has been a firm advocate of growth through innovation. Quincey referred to innovation as a “competitive advantage” in the company’s full-year results in February.
Speaking during the company’s first quarter earnings call today (30 April), he said that advantage does not have to come purely from entirely new products.
“We know that sometimes the most successful, lasting innovations are simply improving the taste of existing drinks,” he told investors.
Coca-Cola rolled out a new “orange-ier” flavour for Fanta last year, which was informed by consumer taste tests. These kinds of renovations to existing products can serve to recruit new consumers and “remind current consumers what drew them to their favourite beverages in the first place”, Quincey said.
Renovation of existing drinks forms one part of the business’s innovation strategy. Another is products designed to bring buzz and excitement to the company’s brands. Under the Coca-Cola Creations platform, the brand has launched a whole range of new products, including Starlight, which was inspired by space, Byte which was influenced by the metaverse, and Happy Tears, launched for Random Acts of Kindness Day.
In the end we are not setting ourselves up to sell what we make, we have got to sell what the consumers want to buy.
James Quincey, Coca-Cola Company
“In some of the Coke Creations, the focus is on re-engaging with consumers in a novel way to drive relevance to the core brand, so you’re not expecting it to last,” he said.
The third type of innovation is perhaps the more traditional form, where new products are launched designed to improve Coca-Cola’s offering as a total beverage company. Quincey cited the Coca-Cola and Jack Daniels collaboration as one such example.
Then there is innovation in pack size, which can offer consumers premium propositions or value entry points.
“There are different types of innovation at play here, all driving the business,” Quincey stated.
The Coca-Cola Company has seen around a quarter of its growth come from innovation in recent times; however, Quincey stated that it isn’t necessarily targeting that. It is not seeking to artificially inflate its innovation and instead pursues consumer-centricity.
“In the end we are not setting ourselves up to sell what we make, we have got to sell what the consumers want to buy,” he said.
The company’s mission is to grow through what consumers demand, rather than pushing its own agenda: “If that is led by a great new innovation or by 138 years of classic Coke, then that’s the answer,” Quincey said.
