Coca-cola Is Axing 200 Beverage Brands To Refocus On Money-Making Drinks

Coca-Cola is getting rid of 200 brands, nearly half of its beverage portfolio, to focus on more profitable categories.

Coca-Cola has already discontinued some of its famous brands like Tab, Zico and Odwalla. With renewed focus, the company will promote core products like Coca-Cola Zero Sugar and new trending brands, like the caffeinated seltzer it launched recently, Topo Chico hard seltzer and AHA.

“The company expects to offer a portfolio of approximately 200 master brands, an approximate 50% reduction from the current number, and phase out some products, such as ZICO and TaB,” the company said in a release.

Without getting into specifics, CEO James Quincy said in an earnings call that the company may let go the hydration category including sports drink Powerade, Vitamin Water and Dasani. Water and sports drink volumes plunged by 11% in the third quarter.

Other products to be phased out by Dec. 31 are Coca-cola Life and Diet Coke Feisty Cherry. Many brands that Coke plans on shutting down are only sold in select markets, not across the country, Quincy said. Regional products like Northern Neck Ginger Ale and Delaware Punch will also be discontinued.

As COVID-19 shuttered restaurants across the globe, Coca-Cola's global unit case volume fell by 4% in the third quarter. Revenues also declined by 9% to $8.7 billion.

As businesses are starting to recover, Coca-Cola believes reshaping its portfolio will help the company regain business. Closure of these brands will free up resources to focus on growing trademark brands like Minute Maid and Simply, and fund new brand launches.

Coca-Cola had been contemplating slimming its beverage portfolio before coronavirus hit, but the pandemic helped the company put its plans into motion faster.

“We are prioritizing bets that have scale potential across beverage categories, consumer need states and drinking occasions,” Cath Coetzer, global head of innovation and marketing, said. The company said it will follow the consumer and drive growth and impact, by choosing brands that deserve investment and resources.