Coca-Cola to Close Odwalla Juice Business -- Update
02 July 2020 - 3:17AM
Dow Jones News
By Jennifer Maloney
Coca-Cola Co. is discontinuing its Odwalla juice business and a
refrigerated trucking network that delivered fresh drinks to
stores, the latest sign of consumer-goods companies narrowing their
focus during the coronavirus pandemic.
Odwalla is one of the biggest brands Coke has eliminated. The
move will cut about 300 jobs, a company spokeswoman said.
Coke will stop delivering Odwalla to stores by the end of July
and will pick up unsold inventory through August, she said.
After several years of assessment on Odwalla's performance, "we
couldn't make it work, we couldn't figure out the
cost-effectiveness of it," the spokeswoman said. "It really is the
result of consumers changing what they want so rapidly. By freeing
up those assets, we can reinvest those costs in what consumers want
today."
Coke's chilled delivery network includes about 230 trucks, all
of which will be sold, the spokeswoman said. Those trucks also
carry Simply orange juice and single-serve Fairlife milk. The
company will find other routes to market for those products, she
said.
Coca-Cola bought the Odwalla brand in 2001 for $181 million and
the assumption of about $5 million in debt, in a bid to expand into
premium chilled juices. But the brand's growth stagnated. Last
year, it ranked seventh among drinks made from 100%
not-from-concentrate juice in U.S. retail stores, according to
Euromonitor International.
The smoothie category has declined and the Odwalla brand has
"endured ongoing financial challenges," the spokeswoman said.
Across the consumer-goods industry, sellers of cars, potato
chips, toilet paper and beer have been narrowing their offerings
since the coronavirus pandemic disrupted supply chains and nudged
consumers back to familiar brands. Some companies that already had
been looking to eliminate underperforming products are accelerating
that process.
Two years ago, Coke's CEO said he had started issuing quarterly
"zombie lists" to the company's top markets, identifying products
that hadn't grown for three years. Many of them were products with
little brand recognition.
"It is more important than ever to evaluate where we can improve
efficiencies in our business and operations," John Hackett,
president of Coke's Minute Maid business unit, said in a statement
about the decision to discontinue Odwalla and the chilled delivery
network.
Write to Jennifer Maloney at jennifer.maloney@wsj.com
(END) Dow Jones Newswires
July 01, 2020 13:02 ET (17:02 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Coca Cola (NYSE:KO)
Historical Stock Chart
From Apr 2024 to May 2024
Coca Cola (NYSE:KO)
Historical Stock Chart
From May 2023 to May 2024