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Coca-Cola defends C2 despite shake-up

10-Jan-2005

Coca-Cola's chief marketing officer resigned last week, but the company would not reveal whether poor sales of the low-carb, low-cal drink C2 prompted this decision.

Following news of Javier Benito's departure, the beverage giant announced that its North America retail and marketing functions - both of which fell under Benito's bailiwick - have been divided into two separate entities.

Spokesperson Ben Deutsch declined to comment on press reports that Benito's departure was prompted by poor sales of C2 since its US launch last June. He conceded that volume sales of C2 had been below projections, but attributed this to initial pricing issues.

 

Nonetheless, Deutsch maintains that C2 has resonated with the core target - that is, consumers who alternate between sugar and diet drinks. "Trial and repeat rates have been in line with our objectives," he said.

 

In a financial report released in October 2004, Coca-Cola's admitted its performance had fallen short of goals and that the company was not fulfilling its potential. Earnings per share were $0.39 in the third quarter 2004, compared with earnings of $0.50 in the third quarter of 2003.

 

In November 2004 NutraIngredientsUSA.com reported Fitch Ratings' findings that despite accounting for 29 percent of the overall drinks sales in the US, volume sales of carbonated soft drinks (CSDs) experienced growth of just 1 percent in 2003.

 

The introduction of C2, as well as rivals PepsiEdge and 7Up Plus, indicates that drinks companies are responding to this sluggish growth by trying to create an image of health and wellness that fits with current lifestyle trends.

 

There is no lack of creativity from major players with continually evolving development pipelines, Fitch analyst Carla Norfleet Taylor told NutraIngredientsUSA.com last year. However she does not believe nutrient-added or low-carb CSDs will catch-on and influence the market in the same way diet drinks did.

 

"We have not seen any indication that 7UP Plus will be revolutionary in the same way that diet sodas were, proliferating into a multitude of flavours," she said.

 

Coca-Cola's newly formed US retail division will be led by Melodie Justice. John Hackett has been appointed senior vice president for Coca-Cola's North America marketing division.