The pandemic has been particularly hard on small businesses. An estimated 100,000 small businesses have closed forever due to the economic collapse in the wake of the coronavirus pandemic. Other estimates suggest that 20 percent of all small businesses will forever shut down due to the countrywide economic collapse. Now, iconic soda brand, Coca-Cola, has come forward to announce it has “canned” more than 200 beverage brands and will forever take these off the shelves at grocery stores near you.
Only a few days after Coca-Cola announced it would kill the consumer favorite, TaB brand, it released another statement claiming it would stop selling upwards of 200 other brands people love. TaB had a cult following. Those people are heartbroken that Coke will be killing their favorite drink. But the 200 other brands that are being killed indicates that Coca-Cola might not be doing as well during the pandemic as some thought. By killing hundreds of beverage brands, they’re ridding themselves of about fifty percent of their beverage portfolio.
The news shook investors during the October 22 Coca-Cola earnings call. The announcement came after it said it was killing TaB as well as its coconut water beverage, Zico, and its healthy smoothie line Odwalla. While many of these items only won the hearts of a specialty market, this mass exodus of Coca-Cola brands could hurt people around the country.
Besides cutting thousands of jobs in the production of these 200 beverages, Coca-Cola will also be hurting sales of stores that carried these items. Coke is hurting the American economy when the country needs them most.
CEO James Quincy did not reveal which beverage brands his company would be canning forever. However, it was announced the water and sports drink sales fell a staggering 11 percent in the third quarter. It can be assumed that since more people are staying home during the pandemic, they’re not buying these portable items as routinely as they usually would.
With sales dropping in this category, you might never be able to taste Dasani water or Powerade or Vitamin Water drinks ever again. Although it was not announced whether or not these lines would be cut from Coca-Cola’s portfolio of beverage brands, they are at risk due to the segment’s floundering sales.
Although this news might point at a bottom-line struggle among Coca-Cola’s leadership, it could also be seen as a growth strategy. By cutting ties with underperforming beverage brands, Coca-Cola can take money that was once allocated to them and put it toward brands that are succeeding. This means that Coke could make more money on successful brands rather than shoveling money into brands that are not performing too well.
The smaller beverage portfolio will also give Coca-Cola more cash to play with new products. They’ll be able to experiment and try to get a larger market share amid the exploding “hard seltzer” category that continues to gain in popularity amid the global pandemic.
Will you be sad to see some of Coca-Cola’s world-famous brands go the way of the dinosaurs this year?
Every time you share an AWM story, you help build a home for a disabled veteran.