The new CEO of Coca-Cola is keenly aware that the company’s future may depend more on other beverages like water, juices and tea — and not its classic soda brands.
“What’s got us to 130 years of success is not going to take us on the next 130 years,” Coke CEO James Quincey told CNN’s Poppy Harlow.
“As the world develops, as economies grow, as the world organizes, people still want to enjoy beverages. Actually each year, they spend more on beverages, but they want choice,” he added.
Quincey, who took over as CEO of Coke last May from long-time chief Muhtar Kent, spoke with Harlow for her latest Boss Files podcast. He said Coke needs to be more innovative and avoid complacency — even if that means missing the mark occasionally.
“We’ve got to try things. Not all of them will work. We don’t need to get too upset when we have failures. We need to learn, move on, and reinvent,” Quincey said.
Quincey said Coke may even start to look more like a technology company in some respects. Products need to get to market faster and tweaked after the fact so they get better. Think of how Apple and Google roll out their iOS and Android updates.
“We’ve got to experiment, which means learning from the tech industry, the 1.0, the 2.0, the 3.0. Don’t make it perfect, get something out there, learn, and make it better,” Quincey said.
Related: Coca-Cola needs more products not named Coke
It’s clear that Wall Street wants Coke to shake things up as well. The stock has lagged its top rivals Pepsi and Dr Pepper Snapple — which just agreed to sell itself to coffee giant Keurig Green Mountain — for the past few years.
Pepsi owns snack food giant Frito-Lay and cereal and oatmeal maker Quaker, for example. And before Dr Pepper Snapple sold to Keurig, it acquired antioxidant beverage maker Bai Brands for $1.7 billion.
Coke has to diversify further. Warren Buffett, Coke’s biggest shareholder, famously guzzles several Cokes and Cherry Cokes daily. Quincey says he realizes people like Buffet are the exception.
Quincey said that the first thing that the Oracle of Omaha asked him after he was named CEO was how Coke’s e-commerce initiatives in the U.S. were doing. So much for the notion of Buffett being a tech-averse Luddite!
Coke has already taken steps to move beyond soda. The company is one of the biggest makers of bottled water thanks to its Dasani brand. It bought vitaminwater maker Glaceau for more than $4 billion more than ten years ago.
More recently, Coke acquired sparkling water maker Topo Chico — a move that will position the company to better take on the super popular LaCroix brand owned by National Beverage.
Quincey hinted that Coke is willing to do even more acquisitions. But he was coy when asked if the company would look to expand into food like Pepsi or alcoholic beverages, simply telling Harlow “never say never” in response to both questions.
But Quincey is not throwing in the towel on soda just yet. He said he was excited about the four new brands of Diet Coke. Zesty Blood Orange is his personal favorite.
The company also has a hit with the new version of Coke Zero, rebranded Coke Zero Sugar.
“We’re really getting traction globally around some of the reformulations, so that people can enjoy the drinks that they love, but without sugar,” Quincey said.
He added that Coke is also experimenting with smaller packaging sizes for its sugary beverages to reduce the number of calories in each drink.
Despite all these changes, Quincey said the company isn’t going to abandon its namesake product anytime soon.
“I don’t think there’ll be a day without Coke. The world would be a smaller and somewhat sadder place if there were no Cokes,” he said.
