The soft drink business has some of the highest margins in any industry. Coca-cola (KO) and Pepsi (PEP) continue to prosper primarily because of the brand equity they’ve built over the years. There may be small barriers to entry, but taking on the marketing budgets of Coke and Pepsi is tough.
So it should come as no surprise that KO is willing to trade a little of its secret coke recipe, it’s “IP” if you will, for a marketing and sales boost. A new commerical in the UK revealed these facts:
- Coke has “no added preservatives or artificial flavours.”
- Its ingredients include “the best spices from around the world.”
- The recipe has not changed in 122 years.
The advertisement is part of Coke’s new marketing campaign, “Pemberton”, named in honour John S. Pemberton, the apothecary who created Coke instead of the healthy drink he was trying to concoct. According to Cristina Bondolowski, global brand director for Coca-Cola, “‘Pemberton’ is more fact-based, affirming for consumers that Coca-Cola never has had, and never will have, added preservatives or artificial flavours.”
We agree: The aura around the recipe is not nearly as valuable nowadays as a reassurance that Coca-Cola isn’t polluting our bodies with a smörgåsbord of chemicals.
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