It's official. Coca-Cola (NYSE:KO) is preparing for the imminent launch of its coffee/cola creation that it hopes will give consumers a new definition to the term "adult beverage" (non-alcoholic, of course, although Anheuser-Bush (NYSE:BUD) dreamed up a beer fusion a few years ago). Get ready for Coca-Cola Blak, which will launch here in the U.S. on April 3. Cola, coffee -- are consumers ready for the best of both worlds?
Dubbed a "carbonated fusion beverage," Motley Fool Inside Value recommendation Coke describes the new product as a "sophisticated, premium blend of Coca-Cola, natural flavors, and coffee essence." From its targeting of adult customers looking for a natural pick-me-up to the smattering of words like "fusion," "premium," "essence," "rich," and, of course, "coffee" in its press release, it's easy to see that Coke's trying to tap into the ravenous coffee generation that Starbucks (NASDAQ:SBUX) awakened.
My Foolish colleague Rick Munarriz wrote about this very product last winter. I agree wholeheartedly with his contention that a beverage like this one doesn't pose much of a threat to Starbucks, even as it tries to capitalize off similar elements. He compared Coca-Cola Blak to the premium-energy-drink market, and I'd say that's more on target than the comparison to Starbucks. I mean, do you really expect consumers to suddenly exchange their morning coffee pick-me-ups for fizzy coffee sodas?
On the other hand, it's clear that beverage concerns like Coke, Pepsi (NYSE:PEP), and Cadbury Schweppes (NYSE:CSG) need to come up with innovative new beverages that play off current trends. Their "low-carb" lines didn't go over well with consumers, playing off a fad that faded from mainstream fanaticism rather quickly. (In case you're wondering, Coca-Cola Blak is a mid-calorie beverage.) However, soda slingers have had some success with other types of drinks, like sports drinks and energy beverages, as well as other flavors that can pique shoppers' interest, like seasonal offerings that catch attention and rotate in and out of the soda supply.
The logic of Coke's strategy with Coca-Cola Blak makes a lot of sense. It's been clear for quite some time that pop peddlers need to come up with ways to keep their products fresh as the market for their core products has grown saturated. Of course, in the long run, it'll be the taste that will be the real test, and Coke investors have their fingers crossed for a hit. This Fool can't wait to see whether there will be fans for this fusion.
For related content, see the following stories from the Fool archive:
- Coke was recently named Best Blue Chip here at the Fool.
- Not too long ago, Coke said there would be no more plain vanilla Coke.
- Remember Blue Dew and other variations?
Coca-Cola is a Motley Fool Inside Value selection. To find out what other stocks Philip Durell has dubbed uncommon values, click here for a 30-day free trial.
Alyce Lomax owns shares of Starbucks. She wakes up with Diet Coke but switches to Starbucks for a mid-morning coffee break.
