Coke rides smaller cans to financial gains
ATLANTA — Coca-Cola’s Super Bowl ad this year featured Ant-Man and The Incredible Hulk battling for a mini-can of the company’s namesake soda.
After a lot of twists and turns and broken concrete, the two Marvel comic book characters — one extra big, the other extra small — wound up being satisfied by the same 7.5-ounce drink.
What the ad didn’t say is that the two superheroes also paid a lot more for the downsized drink, at least on a per ounce basis.
Giving consumers smaller amounts of soda but getting more revenue from each sale has become a cornerstone of the Atlanta beverage giant’s effort to deal with flagging enthusiasm for soft drinks.
Launched seven years ago as the debate over Coke’s role in America’s obesity epidemic grew heated, sales of 7.5-ounce mini-cans, along with 8-ounce glass and aluminum bottles, have been a boon for Coke, growing double digits over the last three years.
They rose 15 percent in the first five months of 2015.
The smaller versions are elbowing 12-ounce cans and 2-liter bottles for grocery shelf space.
More important, mini’s are driving revenue, says Sandy Douglas, president of Coke North America.
A regular 12-ounce can of Coke sells on average for 31 cents. A 7.5-ounce mini sells for 50 cents.
“A 12-ounce can traded to a 7-ounce can is a 30 percent reduction in volume, but it’s an increase in revenue,” Douglas said during Morgan Stanley’s Global Consumer & Retail Conference in November.
Coke shareholders are no doubt impressed, but not everyone thinks this is a good thing.
Michael Jacobson, president of the health advocacy group Center for Science in the Public Interest, said the potential harms of a 12-ounce can, such as diabetes and tooth decay, are lessened in a Coke mini because the packaging is smaller.
But he worries some who don’t drink sodas may be tempted to give the mini-can a try because of its size.
“I don’t know how this is going to shake out but we should know soon as the popularity increases,” he said.
