This week's beverage and snacks industry headlines revealed some interesting new product moves for Coca-Cola (NYSE:KO), its bottler Coca-Cola Hellenic (UNKNOWN:CCH.DL), beverage and snack giant PepsiCo (NASDAQ:PEP), and coffee, tea, and sandwich seller Starbucks (NASDAQ:SBUX). New product innovations demonstrate a desire on the part of these companies to renew customer interest and keep them coming.
Coca-Cola decided to introduce, on a temporary basis at least, a new product in its carbonated beverage segment. The company teamed up with NBA basketball player Lebron James to come up with Sprite 6 Mix in Sprite's first "collaboration with a cultural influencer" according to the company press release. The Sprite 6 Mix represents a mixture of the taste of Sprite with cherry and orange flavoring. The product became available in the middle of March. Coca-Cola distributes the product in 20 oz bottles and 19.2 oz cans and sells them in value and convenience stores. Its limited edition status serves as the only downside to this product innovation. Coca-Cola needs all the help it can get in its carbonated soda business. Globally, Coca-Cola grew its sparkling beverage and non-sparkling beverage volume 1% and 5% respectively during 2013.
Milky juice anyone?
In China Coca-Cola saw huge success with its Minute Maid Pulpy Super Milky drink according to the newsletter Food and Drink Europe. Terry Rabson, a regional engineering manager for Coca-Cola Hellenic, said the potential for such a drink would vary from region to region in Eastern Europe. For example, Rabson said that people in Russia may possess different preferences than people in Romania. He also reports that market tests showed a failing grade in Western Europe when it came to beverages with "pulp and bits." However, he said a greater market potential exists in Eastern Europe for that type of drink based on historical data going back to the Eastern Bloc times.
New Lay's potato chips
In other news, PepsiCo's Frito-Lay North America division introduced two new potato chip products: Lay's Kettle Cooked Lattice Cut Aged Cheddar and Black Pepper and Lay's Kettle Cooked Lattice Cut Roasted Garlic and Sea Salt. According to PepsiCo's press release the chips come with an "open-cut lattice shape". The cooking method utilized allows for a "crispy texture" that maximizes flavor and texture. These new product introductions add to an already diverse product line for PepsiCo. PepsiCo doesn't need to entirely rely on beverages carbonated or otherwise. As a matter of fact snack volume outgrew beverage volume by a 3 to 1 margin when factoring out acquisitions, divestitures, and foreign currency translations.
Beer and wine at Starbucks
At Starbucks' annual shareholder meeting, CEO Howard Shultz announced an expansion in distribution of beer and wine to additional cities, according to Nation's Restaurant News. This represents a move to boost sales in the latter part of the day for Starbucks restaurants which sees most of its sales in the morning. Nation's Restaurant News said that beer and wine sales would work best in city locations close to theaters and other restaurants. Starbucks always remains on the cutting edge of trying to satisfy No.1 in business: The customer.
While it's great that Coca-Cola wants to promote its carbonated beverages via celebrity co-branding, Coca-Cola needs more permanent innovation. If the new Sprite 6 Mix meets with market success it should consider making it a permanent part of its product portfolio. Coca-Cola Hellenic may face greater challenges in the form of political upheaval in the former Soviet Union such as the Russian invasion of the Ukraine resulting in lower demand no matter what products it introduces. Look for PepsiCo and Starbucks to continue their own product innovations. These companies seem to understand that complacency can result in business death.
William Bias owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola, PepsiCo, and Starbucks. The Motley Fool owns shares of Coca-Cola, PepsiCo, and Starbucks and 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.