What's Going On with Coke Zero and What Can Be Learned From It?
When Coke Zero hit the market in 2005, it was Coca Cola’s largest product launch in more than 20 years. Coming from one of the world’s most valuable brands, it was clear from the start that Coke Zero was destined for big budgets and big results.
No one had forgotten, of course, that the company had foisted New Coke onto a world that was quite happy with the original. There’s no doubt that the beverage juggernaut had done their homework in advance and knew exactly where they were headed and how to get there. From the outside, I’m now not so sure that’s true.
Here’s why.
2005
Coca Cola Zero arrives with great fanfare. It addressed the #1 concern of those who either hadn’t transitioned to diet beverages or did so grudgingly: diet versions just didn’t taste like the original. Overwhelmingly, the diet soda hesitancy was a male audience. Coke Zero remedied that because, to most, it tasted exactly like Coca Cola. I always had a hard time referring to the original as “Classic”. Coca Cola Zero was clearly from Coke but it was in black can, perhaps both a nod toward differentiation from the original and to appeal to their intended younger male target segment. The marketing was worthy of the brand too as it leveraged both regular Coca Cola and Coke Zero. One ad showed Coca Cola executives talking about suing Coke Zero for taste infringement.
Sales grew over the years. Labels evolved. And then things started to get complicated.
2016
Coca Cola Zero Sugar is introduced in the UK with a slightly new name and new formulation.
2017
Despite growing sales in the US, the company decided to rebrand Coke Zero to Coke Zero Sugar and replace the formula in the US. Jay Willis’ piece in GQ about the demise of Coke Zero “original” is well worth a read, “Coke Zero is Gone Because We Live in a Grim Dystopia in which Nothing Good Can Exist.” The change sparked a trolley dash as consumers stocked up on their cherished original formula.
More label changes with red becoming a prominent color.
2021
As if their previous reformulation wasn’t enough, Coca Cola decided to do it again and this time change the label entirely. "Despite its enormous success, Coca-Cola Zero Sugar still represents a relatively small percentage," of the Coke brand, said CEO James Quincey during an April analyst call discussing first quarter results. "The improved recipe brings its taste even closer to that [of] the iconic Coca-Cola," he said, adding that "this was influenced by consumer insight and our focus on constant improvement."
Hmmm…constant improvement. It’s a catchy phrase and perhaps a temptingly dangerous one in brand management. How does one honor the consumer familiarity and affinity built over the years while regularly changing both the formula and the label? I’m not sure.
Branding expert, David Taylor, founder of The Brandgym, talks about “treasuring and measuring brand assets.” In a conversation on the What I Wish I Knew podcast with myself and Simon Daw, Taylor compared brand assets to a factory. “Companies would be far less likely to tear down a factory they spent $100 million to build than throw away what they’ve built in brand assets for the same amount of money.”
Full disclosure: I grew up in Atlanta, home of Coca Cola. I’m a lifelong fan of the brand and the company as well as an avid drinker of Coke Zero. I first tasted Coke Zero at a pre-race marathon expo in San Diego. Since then, I’ve run many miles and marathons. It’d be fair to say that I drink more Coke Zero cans per day than miles I run…and my average daily mileage is over 7.
No doubt, the Coca Cola Zero Sugar brand team do know their stuff and have reams of research data to inform their decisions. I don’t know their business. Still, I believe that the case of Coke Zero can illustrate lessons for other brands. Here are a few…
Know who you’re for…and who you’re not. Targeting the wrong segment or attempting to appeal to too many are common mistakes by brand marketers. Define your target segmentation, position against that target, and then satisfy those people. Of course, other consumer segments may find your product appealing. The obvious tactic is to engage in consumer conversations, something that Andrea Faulker Williams and Brian Williams, founders of Tubby Todd do very well. “We talk with our consumers like they’re our friends.”
Know what you’re for…and what you’re not. What’s the message that resonates with the target? Why will they care? Why will they buy? In this case, sugar content must have become a more important consumer factor than zero calorie. Any brand should stand for something. Shifting and drifting isn’t necessarily reflective of “constant improvement” but instead a search for market fit. And that can confuse consumers. Wylie Robinson, founder of Rumpl blankets, talked about “building a narrative around your brand and around your business.”
If you’ve nailed the segmentation and the messaging then branding should follow. In a world of (very) large budgets then consumers may begin to welcome variety and a constant evolution of design. Others may not have the flexibility…or cash. Brands become assets when target consumers are familiar with what it should look like. Think of your brand as a factory and don’t walk away too soon. Gorilla Glue and Yeti are solid examples of building consistent brand assets across their product lines.
Ultimately, brands simplify decisions by consumers and retailers and in the process, build community. Bob Rief, former CEO of Nike Golf, Reef Sandals, and Sanuk, said, “The opposite of love isn’t hate, it’s indifference.” Communities are built because people begin to care about the brand.
Move quickly to test ideas. “Think less, do more,” David Taylor talked about the rise of insurgent brands and their willingness to try things out. Jeff DeGraff, innovation expert at the University of Michigan said, “We learn by accelerating the failure cycle, not by slowing it down.” Bigger companies and cultures tend to overthink and move slowly. It’s an understandable approach as they also tend to have more at stake.
I learned years ago that other categories can serve as sources of inspiration, ideas, and lessons. Coca Cola Zero Sugar will probably continue to evolve. And I’ll continue to drink more than my share while also watching for a few lessons along the way.
Mike Irwin is an advisor, blogger, mentor, operator, podcast host, and strategist. Drawing from his past as a startup co-founder/President, executive officer of a $1+ billion market cap company (WD-40), public company CFO, VP Marketing, global chief strategy officer, head of sales, and board member, Mike helps companies grow sales, improve profitability, and scale up. He serves as an advisor and on boards of directors. He currently serves on the boards of directors of Kano Laboratories, Kitchens For Good, and San Diego Sport Innovators. He is co-host of the podcast, What I Wish I Knew with Mike Irwin & Simon Daw. Follow him at BottleRocketAdvisors.com, get in touch at mike@bottlerocketadvisors.com or connect on LinkedIn.