Would You Share a Coke With Your BFF?

The "Share a Coke" marketing campaign met with great success in Western Europe. Can its success be duplicated here?

Jul 10, 2014 at 6:34PM


Source: Motley Fool Flickr

On June 10, Coca-Cola (NYSE:KO) introduced the "Share a Coke" marketing campaign to the U.S. markets where consumers can find their names and the names of friends on 20 ounce bottles of Coca-Cola. In addition, consumers can find common millennial nicknames like "Wingman" and "BFF" on larger bottles. Also consumers can use QR Codes on Coca-Cola Freestyle machines to send friends coupons for a free 20 ounce bottle of Coca-Cola. Let's check out why Coca-Cola expanded this marketing campaign and what it means for investors. 

Declining sparkling beverage volume
Coca-Cola hopes that encouraging people to give each other Cokes will help raise brand awareness enticing more consumers to purchase Coca-Cola in North America. North American sparkling beverage volume has declined steadily since 2012 (see table below). Seeing this pattern, Coca-Cola decided to bring the highly successful "Share a Coke" program to the United States.


North American Sparkling Volume Change

YTD 2014






Source: Sec Filings

Positive precedent
The "Share a Coke" program saw much success across the globe. Coca-Cola's Western European bottler Coca-Cola Enterprises (NYSE:CCE) credited the program with the 1% volume increase in its sparkling flavors and energy segment and the 0.5% increase in its Coca-Cola trademark volume in 2013. Sparkling beverages actually performed better with non-sparkling beverages declining for Coca-Cola Enterprises. Overall Coca-Cola Enterprises saw its 2013 volume remain even with 2012 thanks to the increase in sparkling volume. 

Will it work?
Coca-Cola faces headwinds in the form of the healthy lifestyles movement. Increasingly, many consumers want beverages perceived to be healthy. The "Share a Coke" program will most likely turn carbonated soda volume around in the short term. However, once the program ends and the novelty wears off people may go back to buying bottled water and juices. Also Coca-Cola could incur significant marketing costs if enough people utilize the free 20 ounce coupon counteracting any positive impact from the campaign.

What's the better alternative?
Coca-Cola is trying to come up with long-term innovations like the stevia flavored Coca-Cola Life. Coca-Cola hopes that the healthier perception of its naturally flavored sweetener will turn around beverage volume, specifically its diet soda volume. However, fellow Fool Rich Duprey argues that stevia goes through a manufacturing process that dilutes its natural appeal and that it will do nothing for soda volume in the long run.

Coca-Cola's entry into the home beverage market could spur carbonated beverage volume over the long-term if a person doesn't get turned off by the lack of convenience. Mixing Coca-Cola may make sense in areas of the world that lack convenience stores and street vendors.

Perhaps Coca-Cola could make this "Share a Coke" program more permanent? Maybe even allow people with uncommon names to specially order Coca-Cola bottles or create a machine that could personalize bottles on the spot. This represents the only way the campaign could make a long-term impact on beverage volumes.

Foolish takeaway
Coca-Cola and Coca-Cola Enterprises' investors should expect a volume boost in carbonated beverages as the campaign remains in full swing in North America and Western Europe. However, Coca-Cola still needs significant product innovation on the carbonated soda front to combat declining volume over the long-term. Moreover, Coca-Cola needs to figure out more ways to differentiate its non-sparkling portfolio giving its juice, tea, and water products the moat the Coca-Cola brand enjoys. 

Buy the best dividend stocks in the market
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. Coca-Cola was an excellent dividend grower for many years that netter investors large fortunes. But, frankly, there are better dividend stocks at your fingertips. With this in mind, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


William Bias owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola. The Motley Fool has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information