When Big Companies Get Innovative, They Produce, But Do You Decide?

By Greg W. Prince

@@img1 In a democratic republic, we do not get to decide the course of every tax cut proposal, every possible troop commitment, every appropriation in the federal budget. We may be a democracy, but we only elect our representatives and they elect to do what they think is right or what they think we think is right. Got a Constitution? Check the fine print.
It’s the greatest system in the world, but we the people get to decide very little directly for ourselves. Even American Idol is narrowed down for us by Paula, Randy and Simon. Thank goodness for the marketplace, huh? Nobody can tell us what to want, what to buy, what to drink. We get to decide where we’ll take our patronage.

But we can’t have it all. That’s business, baby.
Recently, I’ve been corresponding with a BevNET reader I shall refer to as B from B. He told me his beverage shopping habits were disturbed without warning thanks to the prerogatives of the free market.
The Coca-Cola Bottling Company of New York (OK-B from B is from Brooklyn) just introduced a new bottle dubbed the Smooth Serve. It will be recognizable to the bevnoscenti as a 1.5-liter version of the contour, the shape that echoes Coke bottles of yore and, more to the point, the shape that energized single-bottle PET sales in the mid-’90s.

It’s here. It’s clear. Get used to it?
B from B isn’t ready. He told me he went to his local store to buy some 2-liters of Coca-Cola Classic only to find they weren’t there anymore. The Smooth Serve had taken their place. He shopped around and checked with some friends and found the 1.5 had, like bottle snatchers, come to inhabit the shelf space where the 2’s once resided. My own extensive research-I took a look in my own local supermarket which is serviced by Coke New York-confirmed B from B’s findings. The 2-liters for most Coke varieties were scarce. The 1.5’s were everywhere.

Coke New York says that’s not the idea strictly speaking, that both should be available. The bottler also told The Journal News of Westchester and Rockland counties that this is a great innovation, that it will encourage folks to buy flavors they might not otherwise buy because they worry about a 2-liter’s contents going flat, and that it will make large bottles of soda easier to hold and easier to pour. Shelf talkers at my store made that last point as well.

My hands seem average in size, so I can’t say my own mitt test gave me conclusive evidence. They both seemed grippable enough. B from B thinks it’s a corporate plot to pick more cents per ounce from his pocket. Given the price range Coke New York gave the Journal News, he may be onto something. The ceiling for the 2-liter was $1.50, for the 1.5-liter, $1.20. At that rate, three 2-liters could be had for $4.50, while the equivalent of four 1.5’ers would ring up at $4.80. In New York, that also means an extra nickel is laid out for the extra deposit.

Two-liters are notorious in the business as objects of hot pricing. A Memorial Day weekend hasn’t passed when I haven’t heard somebody fret that 2-liters were going for 49 cents somewhere in this great land (but never in my backyard). One could hardly blame a bottler for trying to get a little more for his nationally known, highly regarded product. But B from B could, and that’s up to him. The customer is always right.

But is the customer always consulted?
No doubt Coke New York, a division of Coca-Cola Enterprises, tested this idea in some form or fashion. Everybody tests everything today. Think if you see a Bush or Kerry ad that it’s just some off-the-cuff message reflecting the respective candidate’s deepest-held convictions?
Whether your idea of a red state or a blue state implies politicization or carbonation, you know ideas aren’t just thrown out into the marketplace on a whim. That’s not to say it’s all a grubby exercise-not where beverages are concerned anyway.

Innovation does come to the fore from consumer product marketers because, yes, somebody thought creatively. Innovation can be genuinely progressive. We’re not schlepping heavy glass bottles home anymore and we’re better off for it, but I know a guy who still bemoans the demise of 64-ounce glass. Coke itself streamlined its boxy multis into sleek Fridge Packs. No doubt more than a few people preferred the old shape, but the new shape was judged to work better and sold well enough to justify the switch.

It’s not unlike the LP lover or VCR veteran, each of them perfectly satisfied, waking up one morning to notice CDs and DVDs were in abundance and their formats were no longer nurtured. The new stuff may be better and may have been proven successful, but gosh, nobody asked if we wanted to give up our records or tapes. And there’s never been a radio station that shifted its sound and didn’t hear from loyal listeners that no one was listening to them.

B from B, who says he’s trying colas from other manufacturers these days, has told Coke he doesn’t like the way the Smooth Serve is elbowing out the 2-liter. Maybe other committed consumers will voice their displeasure or vote with their pocketbooks so that Coke New York (the only bottler in the U.S. to have it to date, though it is in Europe) will pull the 1.5 and bring back the 2 in force. Maybe a greater percentage of shoppers will think this is an awesome innovation and the Smooth Serve will surface everywhere, regardless of where one Brooklynite is coming from.
The Smooth Serve is a nice-looking bottle. Coke may have something there. But a warning to all great, global goliaths of gulp: Ignore Brooklyn at your own risk.

Greg W. Prince (prince@bevnet.com) has covered the beverage business as a reporter and editor for more than 15 years.