OK, maybe I poked a little too much fun at Coca-Cola (NYSE: KO ) back when it seemed to hang its hat on Coke with lime as a way to boost sagging sales. After all, as my colleague Philip Durell, who made the company a selection for his Motley FoolInside Value newsletter, pointed out, this does cut down on the time it takes to make a rum and Coke. And no one in his right mind would think an incremental product like this could have much impact on the top line, right?
Today, I'm left scratching my head again, as Coke rolls out yet another diet Coke. Oops, I don't mean Diet Coke. Nor do I mean C2, the half-diet monstrosity that came with goofy ads and strange sizes. I mean Coke Zero, yet another lower-carb concoction that purports to be different because it will be sweetened not with aspartame but with a combination of aspartame and something called Ace-K.
Yeah, I'm excited, too. The new bev will be introduced when the first can, or sample pack, is auctioned off on eBay (Nasdaq: EBAY ) , with the proceeds going to charity. If I were a shareholder, I might make a plea for Coke execs to keep that money. And maybe hawk a few Virgin Mary sandwiches while they're at it.
Coke's had some pretty unimpressive numbers recently. The main problem is trying to get case volumes moving, and it doesn't help that it's being outplayed in many areas, like sports drinks, by nemesis PepsiCo (NYSE: PEP ) .
Does management get it yet? Stuff like this makes me wonder: "Young people today do not want to compromise on flavor or calories, and we think Coca-Cola Zero's taste and personality will appeal to them." Verbiage like this sounds like it came straight from The Simpsons, not from a company that needs to be doing some serious work. I'm not so sure this "year of innovation," highlighted by accomplishments like -- I swear I'm not making this up -- raspberry-flavored Dasani and new packaging for PowerAde, is going to help much. Ditto the American Idollosers' tour.
Luckily, Coke is pretty good even when it is bad, with thick margins, good balance sheets, and strong free cash flow. Although it never got cheap enough for me, I can see why others have taken their stand. Coke will certainly get it right eventually. The question is, will there be another sale price before the ship is turned?
For related Foolishness:
Seth Jayson ingests his Coke the old-fashioned way, from 6-ounce bottles while listening to the Victriolamatron. At the time of publication, he was racking his brains -- unsuccessfully -- to work in a Coke/Less Than Zero gag, but he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.
RSS Headlines
Fool UK