When we hear the name Coca-Cola we might not instantly think of water. However Coca-Cola Amatil’s brand, Mount Franklin, is the number-one brand of bottled water in Australia. In a market crowded with hundreds of competitors, Mount Franklin and the Pump range of products account for more than one-quarter of all bottled water sales in Australia. Coca-Cola Amatil (CCA) is the local Coca-Cola licensee, manufacturer and bottler operating in Australia, New Zealand, Fiji, Indonesia and Papua New Guinea. Coca-Cola is continually striving for growth in this Pacific region. A core objective of the company is to become the supplier of choice for carbonated and non-carbonated beverages. The company has also set a goal to expand in the health and wellbeing segment, or market category.
The non-alcoholic drink market consists of different product categories, the main ones being carbonated beverages (both sugared and sugar-free), water, sports drinks, energy drinks, juices and fruit drinks. Over the past two decades the growth in the market share in Australia of diet drinks, bottled waters, sports drinks, energy and lifestyle drinks and other sugar-free, non-alcoholic drinks has been steadily increasing. One of the most consistent growth segments in the non-alcoholic beverage market is bottled water. This growth is particularly evident among women under 40 years of age, and with younger, ‘urban’ consumers. In particular sales of bottled water have increased markedly over the last ten years while the proportional share of carbonated sugared drinks has been falling. In Australia in 2006, CCA enjoyed a 58 percent market share of carbonated beverages through its key brands, Coke, Fanta and Sprite, a 27 percent market share in the water category via Mount Franklin and Pump and a 57 percent market share in the Sports category, primarily through Powerade.
As little as 20 years ago the market share of bottled water in Australia was almost zero. Save for a few imported high-end European brands and some sales of sparkling mineral water, Australian consumers purchased very little bottled water. This was in stark contrast to the high-consuming Europeans and even US water consumers. However a
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fundamental lifestyle shift has occurred over this time which has seen
this product category grow tremendously. Despite this, Australia still lags
behind most of the developed world in the consumption of bottled
waters, but organisations such as Coca-Cola have extended their
product lines to create opportunities for increased sales.
The main reasons for this change can be summarised as:
- A shift towards a healthier lifestyle including a move away from
carbonated, sugared-drinks - A growing demand for kilojoule-free beverage options, especially
when accompanying lighter meals such as bought lunches - The willingness of consumers to pay for the convenience of
cleaner, more natural and ready-to-drink chilled water - The convenience offered by innovative packaging options such as
squirt and pump-tops and bottle designs.
Australians now consume more than 20 litres of bottled water per person
each year and the market is growing more than 10 percent a year.
However local market consumption is still well below many European
countries, with many consuming more than 100 litres annually per
capita, such as Italy which consumed 184 litres per capita. The US
consumed over 90 litres per capita.
Ongoing growth in health and wellbeing products has impacted on Coca-
Cola’s revenue sources. In 2001, CCA earned 95 percent of its revenue
from carbonated beverages and only 5 percent from noncarbonated
sources. By 2007, this had changed to 67 percent and 23 percent
respectively, (the other 10 percent now coming from food products
following the acquisition of SPC Ardmona).
There is a general feeling within the community and especially by
younger females (the target demographic for bottled water) that drinking
water is a positive act both for oneself and for the community at large.
Coca-Cola Amatil’s ongoing marketing of Mount Franklin has established
brand value associated with this positive behaviour. Drinking water is a
cleansing and purifying act that results in positive consequences. The
purchase and consumption of Mount Franklin water promotes a sense of
wellbeing. This association demonstrates how the positioning of a
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product, in this case Mount Franklin as Australia’s number one choice for
bottled water, represents the values of its consumers. In order to
continue to grow the brand Coca-Cola Amatil will strive to “…build an
emotional connection with our consumers, giving them a compelling
reason to choose Mount Franklin above all else.”
To this end Mount Franklin has established the Drink Positive, Think
Positive, campaign. It’s only natural that Mount Franklin has enhanced
this connection through its community partnerships with the National
Breast Cancer Foundation. As part of its three-year partnership, Mount
Franklin bottles throughout October are redesigned to reflect the Pink
Ribbon Campaign, point-of-sale material is changed to promote the
campaign and an extensive print, TV, cinema and online advertising
campaign is run. Mount Franklin’s Drink Positive, Think Positive
campaign features the Mount Franklin online survey. Each positive
message left by consumers at the online survey represents a monetary
amount to be donated by Coca-Cola Amatil to the National Breast
Cancer Foundation.
CCA committed $250,000 of donations in 2007 alone. CCA believe that
their actions will build loyalty to the Mount Franklin brand well beyond
the campaign period. A similar campaign and partnership has also been
forged with Landcare Australia.
Apart from its economic strategies, CCA has identified three main
environmental objectives: - Sustainable water management,
- Efficient energy use
- Reduction in packaging and post-consumer waste.
Each of these current strategies is briefly discussed. - Sustainable water management
There is ongoing concern at the environmental costs arising from the
packaging and distribution of bottled water. Critics argue that the
unnecessary transport of water leads to increased carbon emissions.
The water used in CCA’s bottled water products is sourced locally – from
within around two hours’ drive of their production plants. The bulk of their
water is purchased at market rates from small businesses or farmers.
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Sourcing water locally means minimal environmental negatives, such as
carbon emissions that come from unnecessary transportation of water. - Efficient energy use
Measures such as increased efficiencies in water use, less waste in
plant operations and harvesting rain water have helped CCA to maintain
world’s-best practice in the global Coca-Cola system, with just 1.55 litres
of water used per litre of product in Australia. CCA has installed a range
of energy saving devices, resulting in electricity consumption for lighting
declining by 30 to 40 percent. CCA expects energy saving programs to
reduce greenhouse gas emissions by more than 2,000 tonnes of carbon
dioxide a year. CCA is also a significant user of Green Power. - Reduction in packaging and post-consumer waste
CCA are partnering with key customers as part of Australia’s ‘Refresh,
Recycle, Renew’ program to implement public place recycling at venues
such as theme parks, shopping centres and public events. Through
further research and development, Coca-Cola is also working to ensure
that packaging requires less glass and plastic. In 2007, over 25 million
kilograms of plastic will be eliminated through packaging redesigns.
As the Australian market leader in bottled water, Coca-Cola strives to be
a responsible corporate citizen, balancing triple-bottom line objectives of
market success, environmental sustainability and social enterprise.
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