Coke to Discontinue Coca-Cola Energy in U.S.
15 May 2021 - 2:53AM
Dow Jones News
By Jennifer Maloney
Coca-Cola Co. is pulling the plug on its U.S. energy-drink
experiment.
The soda giant started selling Coca-Cola Energy in the U.S. last
year, hoping to break into a fast-growing beverage category that is
dominated by Red Bull GmbH and Monster Beverage Co.
But sales were disappointing. At the end of 2020, Coca-Cola
Energy represented just 0.7% of U.S. energy-drink sales, according
to Beverage Digest.
Coke will discontinue sales of the energy soda in the U.S. and
Canada by the end of this year, a spokeswoman said Friday. The
drink will remain available overseas, where it is sold mainly in
Europe, she said. Beverage Digest earlier reported the move.
The drink has more than three times the caffeine of a regular
Coke and contains guarana, a supplement popular in energy
drinks.
Monster had fought to prevent the beverage giant from selling an
energy version of Coke in the U.S. The energy-drink maker accused
Coca-Cola of violating a noncompete agreement the companies struck
in 2015, when Coke bought a 16.7% stake in Monster and agreed to
distribute its energy drinks in the U.S. and Canada. The two
companies went into arbitration in 2018, and Coke later won the
right to introduce Coca-Cola Energy in North America.
"We are happy with our partnership with Monster, which continues
to perform well," a Coke spokeswoman said Friday. Monster didn't
immediately respond to a request for comment.
Coca-Cola Energy entered the U.S. market in January 2020, but
the coronavirus pandemic soon interrupted its rollout. Because more
people were working from home and traveling less, sales fell at
convenience stores, which usually account for more than 70% of U.S.
energy-drink sales. At grocery stores, meanwhile, consumers stocked
up on products they knew and trusted. Manufacturers and retailers
temporarily narrowed their offerings as the pubic-health crisis
snarled supply chains. Coke, Sprite and Monster sold well. The new
energy drink didn't.
As the pandemic continued, Coke slashed its product portfolio,
permanently dropping smaller or poorly performing brands such as
Odwalla smoothies, Zico coconut water and Tab soda.
Since becoming Coke's chief executive officer in 2017, James
Quincey has pushed the company to take risks on new ideas -- and
ditch them quickly if they don't work out.
The Coke spokeswoman said Friday, "As we scale our best
innovations quickly and effectively...we need to be disciplined
with those that don't get the traction required for further
investment."
She added that the company undertakes a "consistent and constant
evaluation of what's performing and what's not." Two of Coke's
recent experiments are working, she said: Coca-Cola with Coffee and
Aha, a flavored sparkling water.
Write to Jennifer Maloney at jennifer.maloney@wsj.com
(END) Dow Jones Newswires
May 14, 2021 12:38 ET (16:38 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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