Coke boss talks sugar levy and new products

Choosing to come back to the UK soft drinks market at such a pivotal moment in the category’s history could be a blessing or a curse for Coca-Cola European Partners’ (CCEP) new out-of-home (OOH) director Rob Harris, who has spent the majority of his Coke career working overseas.

The possibility of a sugar levy on soft drinks would likely fill many directors in his position with fear. Add to that the UK consumers’ demand for craft and premium products with affable stories behind them and you’ve got yourself a big challenge. But Harris doesn’t seem even slightly phased by the trials the sector is facing.

On the top floor of the Coca-Cola company’s plush Oxford Circus offices – where you can barely turn a sleek trendy corner without seeing a fridge packed with the product – the director seems calm, despite having been in the role for just eight months.

Perhaps his countenance is down to an imminent departure from cold drizzly London to more tropical climes for a holiday. Or maybe it’s because Harris is a man with a decisive plan.

Prior to heading Coke’s OOH GB division, Harris did the same job in the Netherlands for five-and-a-half years and before then was based in Belgium.

He’s now firmly settled into his GB role, despite describing himself as the new boy, and is prepared to take on one of the biggest projects of the year, which is Coke’s annual Designated

Driver campaign. The scheme has existed for the past nine years and encourages designated drivers in the on-trade to stick with softs and avoid alcohol, done through a buy-one-get-one-free offer on the majority of CCEP’s portfolio in pubs.

“It is a really busy time of the year for pubs – there are around 149m trips in Great Britain over the two weeks around Christmas and New Year to the on-premise or licensed arena,” Harris explains.

“It’s our ninth year doing this and it has shown to be a big success for us in terms of encouraging the designated driver to pick up a soft drink instead of an alcoholic one.”

The benefits extend beyond Coke and the consumer, he claims. More than 8,000 PoS packs are available to pubs and other on-trade establishments to help promote the offer to consumers. It’s a campaign that offers operators perks beyond a clear conscience (knowing your driving punters are safe to drive), but it will, apparently, add to a pub’s bottom line too.

“Obviously, the key thing for the operator is they are promoting a responsible message,” Harris continues. “But if you’re offering the right range of soft drinks then you’re rewarding the designated driver with the offer.”

Soft drinks sales grew by 1.8% last Christmas – figures which showed a demand higher than during the rest of 2015, he adds.

Yet, it’s not just the sales of softs that will spike over Christmas, the soft drinks boss maintains. No, according to Harris, overall wet sales have been shown to increase during the period because “by keeping the driver happy, dwell time of the party goes up and the group is happy – so it’s a nice commercial story because a wider range of drinks are bought”.

Government-backed road safety​

Throughout its existence, the campaign has been supported by government-backed road safety charity Think, because it aligns with their road safety agenda, Harris says.

Over the years, the campaign has been refined so the offer is widely promoted in destination venues where customers are more likely to drive, compared with the early years when it was rolled out in city and town centre sites – less effective because most city dwellers wouldn’t be driving home.

A big consumer media push will also roll out this year, covering radio advertising, social media and PR, as well as the cocacola.co.uk/designateddriver web page.

But, despite it being a big focus for Harris and his team, this festive campaign isn’t his only charge. The man is responsible for the products and services supplied to every GB OOH venue and looks at trends, legislation and a raft of other issues affecting the sector.

Getting back to the potential sugar levy, which could see soft drinks companies taxed on the sugar content of their water-based drinks (not fruit juice, for example), he has a plan.

“We take this seriously and obesity is a major issue that we face as a food and beverage industry, and we have a role to play. But, it’s very clear that the contribution of soft drinks to calories in the UK is low, at about 2% overall,” he explains.

“The first thing to do is make sure we are driving all of our marketing behind our zero calorie and light ranges, and we have started to do that with Coca-Cola Zero Sugar and the relaunch of that product and we’re encouraging operators to make sure they have a good stock of the classic soft drinks but also a good range of light ones.”

New low or no-calorie products will be brought to the market in the months ahead, he insists. There will be mass-marketing and information to consumers about Coke’s full portfolio to help inform the public.

More than 60% of its volume will be exempt from the levy thanks to ongoing reformulation and introduction of new products. But Harris confirms that Coca-Cola Classic will be one of the products that isn’t changing.

It’s surprising that such a large and global company with a heavy-handed and visible approach to corporate social responsibility would leave a product out of its reformulation plans.

After an explanation of why, though, it makes sense.

‘Number on soft drink’​

“Classic has been around for 130 years and its success means it remains the number one soft drink in Great Britain and the world for that matter. We have tried to reformulate it before – in the mid-1980s – and everyone knows what happened with that one.

“In this case, we’re very comfortable with how Classic is and we can help make consumers aware that they’re available in different portions and we make it very clear how much sugar is in there. But we will not consider reformulating the sugar in Coke Classic.”

A firm and, some would say, sensible hand. Look at what happened when United Biscuits-owned McVitie’s attempted to reformulate its Digestive Biscuits to make them healthier – there was uprise from the British public. Yes, it makes sense to leave the original product unadulterated and pure, while offering a stable of low and sugar-free alternatives.

Speaking of the future and the raft of enforcement the Government is plastering the food and drink industry with, it is interesting to learn Harris’s thoughts on the future of the soft drinks category.

For him, there is unlikely to be much change, rather a tightening and evolution of the current trends. He explains: “Sugar reduction, obviously, will be bigger in the coming years, but there are also three big trends we’re focusing on.”

And he rolls off those trends: “The first one we call ‘food is the new fashion’ – consumers expect new experiences that are worth paying for and are a treat. We think soft drinks fit in well with that.”

The second is about health, a box that will be ticked through reformulation and other ‘healthier’ product launches. Coke’s acquisition of Innocent some years ago also ties in with this trend.

“Third, consumers expect anything, anywhere and anytime, so you start to think about how you can get the right food and drink range in to serve the different parts of the day – breakfast, brunch, lunch and dinner,” he concludes.

A prediction there won’t be any unexpected change in the soft drinks category is based on past experiences, says Harris, who confidently points out that people are creatures of habit and are unlikely to deviate too much from what they know.

“We like what we like and we drink what we know. So, do I expect it to be a lot different in five or 10 years’ time from today? Actually, no I don’t.”

A more realistic time-frame to make predictions about is the next 12 months within which, Harris hints, we can expect to see more from CCEP. Harris will be harnessing the three long-term trends he pointed out to deliver more products and maybe also introduce new “lights and zero” products.

He will also be looking to bring lessons learned from his time in the Netherlands, a country where designated drivers are whimsically referred to as “Bob”, Harris laughs.

In the meantime, the soft drinks director is treating his GB appointment very much as a blessing and relishes the fact he gets to focus on hospitality, which he describes as one of the “most vibrant sectors” in GB.

With the sector already having morphed into something unrecognisable from what it was a decade ago, it is worth keeping an eye on this OOH boss to see whether his predictions of evolution and no unexpected change actually come true.