The Coca-Cola Company is the world’s largest total beverage company, offering over 500 brands to people in more than 200 countries.
And after 130 years in business, the global CPG giant continues to work hard to build a special bond with its customers.
One key to its success is the ability to turn challenges into opportunities. “It all begins with the capacity to see the opportunities and to work around the obstacles,” Francisco Crespo, Chief Growth Officer at Coca-Cola, told Daniel Binns, Managing Director, Interbrand New York.
And while the company has 2 billion customers, Crespo notes, “There are billions of people who are not using our brands, which makes them potential customers. We view that as a huge opportunity.”
Crespo spoke with Binns about the company’s value to customers, its “disciplines of growth” and its premium prize for “best failure.”
You talk about solving potential customer needs through beverages. How are you applying that?
Coca-Cola is the largest brand in our portfolio. Arguably, it is one of the largest brands across the food and beverage sector and even in the broader fast-moving consumer goods space. The Coca-Cola brand has around 1.5 billion customers in a world with 7 billion inhabitants. This is a massive opportunity.
But in the US, where our flagship brand was invented, over half of the population does not drink Coca-Cola. Whether it’s Diet Coke, Coca-Cola with no sugar or another one of our Coca-Cola varieties, there is still a massive potential for growth here.
It is becoming harder and harder to cut through the noise and truly differentiate. What bold moves have you made to really stand out from the competition and how did you convince your organization to do something more radical than normal?
A key tool we are using to differentiate ourselves and optimize all our brands is what we call the “disciplines of growth.”
The first discipline of growth focuses on the portfolio. All of our brands are now categorized into three different groups:
- A leader, such as the Coca-Cola brand
- A challenger, which is a large brand with double-digit share value but not necessarily the leader
- An explorer, which is where we are irrelevant or insignificant
In the past, we tried to force everything in the portfolio to play by the same rules that governed a leader brand like Coca-Cola, and that doesn’t always work. We now treat explorers and challengers differently and give them room for them to fail, because they are still experiments.
The second discipline of growth is around brand edge. Brands that are healthy and have the ability to grow exponentially have an advantage because they satisfy a need better than other brands. To gain this edge, our brands have to diverge from what is out there with a different and relevant story.
The third discipline of growth is all about rituals. This focuses on being relevant in a specific occasion and then building all around it. We need to understand how we can make it easier for consumers to act rather than think, and for them to have a higher level of motivation with an anticipation of the reward that our products offer.
This is also closely connected to our fourth discipline of growth, the integrated experience. By creating a ritual with our products and integrating them into every aspect of our consumers’ lives, we can really drive growth.
Finally, the fifth discipline of growth is making recipes that we can scale across the world while customizing elements. For example, when we launched Fuze across Europe, we had sparkling tea in the Netherlands, a larger portion of the portfolio with zero calories in Greece, and a modified sweetener taste in Germany. By customizing the idea but still scaling the same product, we are finding better performance.
Coca-Cola has a reputation of not being a risk-taker, largely due to the success of the monolith that is the Coca-Cola brand. What things are you doing to change that cultural component of the business to be able to deliver on the disciplines of growth?
The language and frameworks we use are very important—notice we refer to the “disciplines of growth.” That’s not only because we want a lot of people going through the same type of exercises with rigor, but because a discipline is also a field of study, which means we need to make our knowledge of each of these five disciplines deeper and better.
Every year, our board of directors gives awards that recognize innovation in teams across the world. Last year, for the first time, we handed out a premium prize for “best failure.” We looked at teams where something failed but we gained key learnings from it that we are able to use somewhere else. That sends a very important message to the whole company that failing but learning is very valuable and will be recognized.
At the World of Coca-Cola—our interactive museum in Atlanta—we have a permanent exhibit featuring our biggest failure: New Coke. We display it proudly, embracing failure in the same spirit with which we celebrate success.
One of the key findings from this year’s Best Global Brands report is about positive utility. Coca-Cola has traditionally been on the storytelling, emotional end of the spectrum and has built a special bond with its customers. Yet we’re seeing a lot of CPG companies using marketing to solve customer problems. How is Coca-Cola moving beyond telling the story of the product?
The way we present our utility to customers is through what makes us different. And time and time again, Coca-Cola has found ways to remain culturally relevant.
For example, Argentina recently went through a terrible devaluation. Our communications during that time were optimistic and said, “We’re here, we’re not going anywhere. We’re ensuring that our product is still within your reach, together we will make it better.”
This serves as a reminder that across history, we have gone through ups and downs, and we have always gotten to a better place—and we will find a way again. This optimism meets a very important consumer need of hope through our product.
And in the US, the various jobs across our value chain—whether it’s people who supply the products or stores who sell the products—allow people to build their houses and educate their kids.
These stories resonate with people because they explain what we do, why we are valuable for society and how we are supporting the communities in which we operate.
You are one of the pioneers of transitioning from CMO to Chief Growth Officer. Is there a noticeably different way that you approach the business when you think from this new perspective?
In line with our integrated experience discipline of growth, we have also integrated a lot of our different teams internally. We have marketing, customer and commercial leadership, strategy, insight, storytelling, digital and design all housed under growth now—which means all the different elements that connect to growth are together and can work more closely now.
Our CMOs are also connected to growth and are able to ensure that they understand what consumers are looking for and what specific problems we are trying to solve.
Being a leader requires all these elements: You need insights, strategy, digital and design, and you need all of them working together in an orchestra that produces beautiful music that makes people happier. We want to create a symphony—and we are just at the first sip of a fascinating journey of refreshing the world.
Get more insights in our Q&A series.