coca cola

Sales: £1,145.8m (-2.6%)

Coke has become a byword for excessive sugar consumption. And with sugar the white devil of the age, it’s no surprise Coke is suffering. Britain’s biggest grocery brand has been hit by the seventh largest value loss of the year, with sales down £30.1m and 23.8 million (2.8%) fewer units sold. Ouch.

“It’s fair to say it’s been a challenging year,” says Coca-Cola Enterprises general manager Leendert den Hollander. “There’s never been more scrutiny of the category on sugar than there is now.”

See the performance of red Coke for the impact of that scrutiny: £26.3m (4.2%) has been wiped off its value, which now stands at £599.2m; 17.6 million fewer units (3.7%) have been sold. It’s still huge, of course, but if we were measuring red Coke as a brand in its own right, it would have lost its standing as Britain’s second biggest brand to Walkers (3) in the past year.

Diet, Zero and Life now account for 44.6% of the 830.4 million units shifted in the past year, up from 44.2% a year ago; no and low sugar has racked up £546.6m, or 47.7% of the brand’s total sales, up from 47% a year ago. This shift is the result of the wider debate around health - and CCE’s response to it.

“I’d talk about our strategy in just five words: ‘inspiring sustainable soft drink choices,’” says den Hollander, pointing to the masterbrand campaign that kicked off in the UK last March and for the first time saw all four Cokes advertised as a single brand. The strategy has since been rolled out globally.

Growing emphasis on no or low sugar lines could prove crucial in appeasing health lobbyists. “We don’t debate that there’s an obesity crisis,” says den Hollander, adding volumes of Diet, Zero and Life are up (in litres; Diet and Zero units are down due to a shift to larger multipacks). “What we’d debate is whether a sugar tax, apart from the fact that we already pay 20% in VAT, will change consumer behaviour or deal with the obesity crisis.”

Hence Diet, Zero and Life being brought to the fore in Coke’s ads - the ‘choice’ part of den Hollander’s mantra. Not that it’s delivered much growth so far: only Life is up, by 44.3% to £21.1m. And full-year sales don’t tell the whole story: sales crashed 60.5% in the last four months of 2015, as the trade support given to Life after launch in 2014 tailed off.

Growth could have been hampered by confusion over what Life actually is. In January, CCE announced the scrapping of the original Life, which had 33% less sugar than red Coke, after admitting half of consumers didn’t understand what it is. Production of the new Coke Life, which has 45% less sugar than red Coke, began this week. The aim now is to spread the word about the new, lower-sugar Life.

“Repeat sale rates on Coke Life are in the high 30s; take any benchmark in fmcg and that’s very good,” says den Hollander. “We’re going to a new look, a new formula and a new campaign talking about its specifics. There’s a great opportunity to build awareness, trial and the brand.”

Whether that ends Coke’s associations with the obesity crisis is another matter.