Coke Bets on Zero to Save Cola Category

CHICAGO ( – Coca-Cola zero isn’t a loser after all – it’s the long-awaited spark to revive the flagging cola business.

Internal memo
According to an internal company document obtained by Advertising Age, Coca-Cola Co. plans a huge tactical push behind the brand this year — spending $13 million advertising on NCAA games alone — to retain cola drinkers in its franchise. Coke Zero, which has no calories but claims a taste profile similar to flagship Coke, “is critical to the health of the [Coca-Cola trademark] portfolio to transition males before they leave” the carbonated soft-drink category, reads the document. To do so, “Coke Zero will continue to be supported at even higher levels in 2007, building it into the next mega-brand,” the memo reads.

The brand’s “performance [this] year will determine whether or when it reaches megabrand status” of 100 million or more cases, said John Sicher, publisher-editor of Beverage Digest.

New packaging strategy
Coca-Cola declined to comment, but it’s clear from the document the company is taking no chances. This month it is rolling out new black packaging with a silver ribbon to boost shelf impact. It plans a diverse 2007 media schedule with nearly year-round national TV and digital support including the NCAA, national print around fall football and a sponsorship of Notre Dame football. In addition, it will run ads on AOL, “Grey’s Anatomy,” “24,” MTV and late-night talk shows, along with concentrated radio buys in 20 markets in March.

“Coke Zero should be a key part of every channel plan in 2007,” reads the document, which indicates the Coke bottling system should place Coke Zero on every display next to Coke Classic, and in every “high-velocity” cold-drink outlet. In addition, Coke is recruiting restaurants, cinemas and club stores to carry the brand. Already, Wendy’s and White Castle have signed on.

According to TNS Media Intelligence, Coke spent about $23 million in measured media on Coke Zero through September, while Diet Coke received $57 million and Coke Classic received about $120 million.

Zero positioning shifted
Coke in the U.S. has attempted to migrate Coke Zero’s position from a male drink to a positioning around its “Coke-ness,” reinforcing how Coke Zero tastes more like regular Coke. New advertising extending the “Coke-ness” theme is expected to break in March via Crispin Porter & Bogusky, Miami. Other plans include a spring launch of Diet Coke Plus, fortified with vitamins and minerals, and Coca-Cola Cherry Zero.

Despite widespread skepticism since its June 2005 launch, Coke Zero has logged five months of growth since July, steadily climbing to a 1% share, according to the document. (By comparison, the country’s No. 10-selling brand, Diet Mountain Dew, holds 1.4%.) Sales volume for Coke Zero rocketed 154% in mass channels excluding Wal-Mart in the first nine months of last year, according to Beverage Digest, making it one of the best performers in the company’s fizzy-drink portfolio.