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Interview of Dan Sayre, President of Coca-Cola’s Western Europe Business Unit
How We're Changing Our Business, Inside and Outside the Bottle, in Western Europe
One secret to The Coca-Cola Company’s success over the last 130-plus years has been its ability to evolve with changing social trends and new generations of consumers. Today, the pace of change has never been faster, especially in the highly developed markets of Europe. Dan Sayre, president of Coca-Cola’s Western Europe Business Unit, explains how the company is still evolving in tune with consumers and is as relevant and responsive as ever.
How much change is Coca-Cola experiencing now, compared to other periods in its history?
Put it this way. I joined Coca-Cola in 1983, when we launched Diet Coke. That was a huge shift for our company. Our Coca-Cola trademark was seen as sacred, so introducing an entirely new, calorie-free, version was revolutionary, not only for Coca-Cola but for the whole market. Today, we are making bold moves like this on a regular basis, responding to and anticipating rapid shifts in consumer tastes and preferences. Our commitment to this comes from the top. Our incoming CEO, James Quincey, is calling it "Our Way Forward", which describes how we are evolving with consumers’ needs and desires, staying relevant in their lives and agile in a constantly shifting environment.
Can you give an example of how consumers have changed?
I remember 20 or 30 years ago, people weren’t very interested in the ingredients or formulation of our products – they didn’t look "inside the bottle". People tended to be more interested in how the drink made them feel: was it refreshing, did it make them happy? These emotional and social aspects are still important, but now people are more critical about what they eat and drink. Consumers want less sugar and more products they regard as healthy, natural or with specific functional benefits. We are responding by giving them the choices and the products they desire, and also being much more open and transparent in talking about our products and ingredients, balancing emotional values with easy-to-understand facts.
What has Coca-Cola done in Western Europe in recent years to adapt to these new demands?
The best example is how we have responded to consumers’ preferences about sugar. In the last 10 years, we have removed 96,000 tons of sugar from our portfolio in Western Europe. That’s 384 billion calories. Put it another way, we have cut the average calories per litre by 12 percent since 2007. We’re doing this by adapting the recipe of many of our products, like lowering calories of Fanta and Sprite, or introducing new zero-sugar variants, like our all-new Coca-Cola Zero Sugar. All in all, we have introduced 231 low or no-sugar products in Western Europe since 2010, giving us 375 low and no-sugar choices across our portfolio.
And we haven’t finished yet. We helped shape a new commitment by the association of European soft drinks companies, UNESDA, to reduce the average added sugar content of still and carbonated soft drinks by a further 10 percent by 2020. This is tripling the pace that sugar and calories are being removed from soft drinks in Europe. As market leader, we have played a central role in making this happen, and we’re proud to lead from the front.
What about meeting consumers’ needs with new products?
It’s not all about taking sugar and calories out of our existing brands. We are also introducing a record number of new products and dramatically expanding our portfolio. In Western Europe, we launched 48 new drinks in 2016, like our new organic tea, Honest Tea, in Great Britain, and our adult sparkling brand, FÏNLEY, in France, Belgium and Netherlands and our new range of local waters, ViO, in Germany. We are a drinks company with a broad offering, but there are still many categories for us to invest in. We’d like to learn from and leverage our global successes to do more in ready-to-drink tea and dairy-based drinks, for example. You’ll see even more activity from us this year, with more than 150 new products due to hit the market in Western Europe.
You talk about ‘inside the bottle’. What are you doing outside?
New and different drinks are just one side of "Our Way Forward". The other side of the coin is all about providing smaller and more convenient packaging, so people can control their calories more easily. You can see this with our new 150-ml cans for Coca-Cola, and our smaller 8-ounce glass bottles (237 ml). You can also see it in the way we are making our low and no-sugar options more visible and easier to find, by investing more in their marketing. A great example is our One-Brand marketing strategy for Coca-Cola, which puts Coca-Cola Zero Sugar and Coca-Cola light on the same "hero"level as Classic Coca-Cola. I believe the success of Coca-Cola Zero Sugar in Western Europe has been a real marker of what is possible and we led that launch here in Western Europe.
Is product labelling an important part of this approach?
Consumers now expect easy-to-find and understandable product information to guide their choices. To help with this, we recently joined a coalition of six leading European food and drink manufacturers – including Mars, Mondelez, Nestlé, PepsiCo and Unilever – to back a single labelling scheme for use across the European Union, based on the easy to understand colour-coded system currently used in Great Britain and Ireland. It helps consumers make healthier choices, without the guesswork. It’s the right thing to do; if consumers say this scheme helps them manage their calories better, then fine. Whatever helps people understand what’s in our products, and make choices in a more confident way, is good for us.
Are you being forced to take these actions in reaction to soda tax legislation?
No. We’ve always wanted to give people the drinks they know and love. But now, as times change, their desires change and we are changing with them. More people want to consume less sugar, seek out healthier choices, enjoy smaller portions and have clearer information about what they are putting in their bodies. We are embracing that change and recognising that it’s the future. There are very legitimate public health concerns about obesity, especially in our markets here in Western Europe, and as the industry leader, we have a responsibility to take real action and be part of the solution. That’s why we are doing so much around adapting our recipes and smaller portions, as we know these can tackle the problem efficiently, while also giving consumers the things we know they want.
How would you summarise the future for The Coca-Cola Company?
There has been a lot of talk about our future as a total beverage company. That may not mean a lot to people outside of our company, but it’s a big change in how we see ourselves. As we react to changing consumer preferences and social changes, we need to ensure we are always focused on selling what consumers want to buy. We need to stay ahead of trends and our consumers’ evolving tastes, and that means having a truly diverse range of brands that are focused on their needs.
I’ll give you an example: I used to lead our business in Japan and over there Coca-Cola wasn’t our largest brand by volume. The first was a coffee, the second a tea, and the third was Aquarius. Coca-Cola was the name above the door, but there was so much more to our business. We made sure we had the breadth of products that suited their needs, and it worked. That’s the way I see the future... if we stay focused on where consumers are going, investing in the categories of drinks people want, we will thrive.