Blak to the Future

Innovation, more bolt-ons in the works for beverage giant

ATLANTA -- The Coca-Cola Co. said that it will launch Coca-Cola Blk in January in France, the first of several countriesincluding the United Statesthat are expected to introduce the new cola-coffee beverage in 2006.

Coca-Cola Blk is a blend of Coke, natural flavors and real coffee. The lightly carbonated, midcalorie beverage was designed to appeal to adult consumers.

Coca-Cola Blk is not just a flavor extension. It is a blend of unique Coke refreshment with the true essence of coffee and has a rich smooth texture and has a coffee-like [image-nocss] froth when poured. We believe we have created a new category of soft drinkan adult product in a carbonated beverageand a whole new drinking experience. This brand is ideal for any part of the day when people are looking for renewed energy or simply to take a break, said Marc Mathieu, vice president of global core brands for the Atlanta beverage company.

The launch will be supported by TV, print, outdoor and in-store communication.

Meanwhile, Coca-Cola Co. on Wednesday revealed innovations and packaging along with a new marketing slogan that CEO Neville Isdell said will help drive its previously forecast volume and profit growth, reported Reuters.

Analysts attending the company's investor conference applauded the initiatives, but some noted the new product introductions seemed risky and expressed disappointment about no big acquisition being on the horizon.

Coca-Cola, which has struggled for five years to boost sluggish soft drink sales and meet changing consumer tastes, said it still expects earnings-per-share growth in the high single-digit range. It also stood by an earlier forecast for long-term annual operating earnings growth of 6% to 8%. Unit case volumes, a key sales measure in the beverage industry, are still forecast to rise between 3% and 4% per year, the company said.

I heard from you, from our bottlers and our people that we had an innovation deficit, and they were right. So we have stepped it up, Isdell told an audience of more than 200 people at the Hudson Theater in New York.

Coca-Cola discussed plans for new carbonated and noncarbonated drinksincluding Blkand for attractive packaging in the form of colorful 200ml aluminum bottles, during the presentation.

Also during the presentation, marketing chief Mary Minnick said Coca-Cola was introducing higher-margin extensions in the fast-growing water category and that it plans to launch a Tab energy drink targeting women.

Minnick also announced the company's new advertising slogan: Welcome to the Coke Side of Life.

Coca-Cola has introduced several diet and reduced-calorie drinks in recent months to meet changing consumer tastes. It is also now packaging Coca-Cola in an 8.4-oz. can and touting the serving has only 100 calories, Minnick said.

The company vowed to give higher-margin single-serve drink packages a stronger push.

The company unveiled a new advertising campaign expected to debut in North America during the 2006 Winter Olympics that will promote wellness and showcase its broad lineup of drinks.

It's a transformation of the company from everything starting from product lines to distribution to retail accounts and they have put a lot of effort into it and they have to make it work, said Michael Bellas, chairman and CEO of Beverage Marketing Corp., a research and consulting firm.

Isdell said the company would likely pursue more bolt-on or smaller geographic acquisitions in 2006.

Some industry watchers have said Coke fell behind competitors such as PepsiCo Inc. since it held off from acquisitions and took fewer risks with innovative products. They need an acquisition so that they can channel capital into something other than bolt-ons, said analyst Douglas Lane, president of Douglas C. Lane & Associates. Pepsi shares have outdone Coke's because they have taken the risk.

Isdell said he plans to stay with the soft drink maker for a while and did not divulge any emergency succession plans the company has in place. Answering a question at the end of the meeting, he said he will be around for a while.

Coca-Cola also said it has no plans to go into the food business with its Odwalla brand. Coca-Cola is focused on beverages, while rival PepsiCo Inc. has Quaker foods and Frito-Lay snacks in its lineup along with beverages.

In related news, Charlotte, N.C.-based Coca-Cola Consolidated, the nation's second largest Coca-Cola bottler, has introduced three Cinnabon coffee drink flavors across the SoutheastCinnamon Vanilla Latte, Caramel Nut Latte and Espresso & Cream. They are available in convenience stores, grocery stores and restaurants throughout North and South Carolina, mid-Tennessee, southwestern Virginia, southwestern Alabama, western Georgia, southeastern Mississippi and parts of the Florida panhandle. They will be available in West Virginia by mid-December.

Coca-Cola Consolidated has partnered with New York-based Brain-Twist Inc. to enter the growing ready to drink coffee beverage category. Coca-Cola Consolidated is the first traditional soft-drink bottler to sell Cinnabon coffee.

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