Meeting with investors in NYC on Dec. 7, top Coke executives cite "progress" made over last year and offer look ahead, revealing new products and tagline for upcoming new brand Coke ad campaign. Chairman/CEO Neville Isdell: "I think we've had a good 2005, I think we've made progress." Growth. Coke re-affirms long-term growth targets of: 3%-4% volume growth; 6%-8% operating income; and "high single digit" earnings per share growth. Deals. Isdell says company will continue to do "bolt-on" acquisitions; declares, "you'll see more in 2006."
New ads/tagline. Mary Minnick -- who oversees marketing, strategy and innovation -- says new Coke ad campaign will use tagline: "Welcome to the Coke side of life" with variations like "Chill on the Coke side of life." Global campaign will launch in North America next March. Minnick says new ads will make Coke "more relevant." Also. Coke will debut new corporate branding campaign, with tagline: "Make every drop count." Ads will break on 2006 Winter Olympics. First phase will cite Coke's broad beverage portfolio. Will not rate products, as PepsiCo's Smart Choices campaign does re good-for-you/better-for-you.
New products. Coffee. 'Godiva.' Minnick reveals several new products. One will be RTD "indulgence coffee" for North America. Minnick says it will utilize "ultimate indulgence trademark," but does not say what that will be. However, sources tell BD it will be "Godiva," and, in fact, Godiva filed last summer to extend its trademark to coffee, tea and chocolate beverages. Godiva is owned by Campbell's. Coke's Godiva RTD coffee planned for 2nd half 2006 debut. 'Far Coast.' New brand "Far Coast" will be tested next year in four countries. Will use what Minnick calls proprietary dispenser technology for coffee, tea and lattes; sold in restaurants, etc. Says dispensers will be "kiosks within kiosks." Coffee-cola. Coke confirms launch of "Coca-Cola Blak" coffee-cola (BD 1/21/05). France gets product in January; U.S. during 1st quarter 2006. Premium-priced product in 8.5-oz bottle will be targeted to adults 35+. 'Gold Peak' tea. Coke-NestlE9 partnership, Beverage Partners Worldwide, will launch new tea brand -- "Gold Peak" -- in U.S. next year. Premium line will start with black tea and in 2007 will add green tea.
Concentrate pricing. Isdell and CFO Gary Fayard say company will start being more aggressive on concentrate price increases. Fayard says in past several years, Coke has taken up concentrate pricing less than bottlers' wholesale price increases. Company will now get more aggressive, though changes will vary from market to market. Isdell notes in 1999, bottler return on invested capital was 4%; in 2004 it was 7.5%.
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