(Photo: Mae Mu)

Coca-Cola’s new plan means cutting less popular drinks

Coca-Cola will be cutting half of its beverage portfolio by dropping 200 drink brands including outdated brands such as Tab, Odwalla, Zico, and more. Coca-Cola plans on reducing its portfolio to divert the funding to more profitable products.

The company will be focusing on further development for core products as well as new brands including the caffeinated seltzer brand AHA and hard seltzer Topo Chico. Coca-Cola did not provide an exact list of brands that will be phased out but revealed that brands in the “hydration” category are likely to be cut including Vitamin Water, Desani, and Powerade.

According to third-quarter reports for Coca-Cola, sports drinks and water volumes decreased by 11% and other Coke companies that are only sold in certain markets will be facing a shutdown. Coca-Cola CEO James Quincy explained that underperforming brands have “little to no scale” with only 2% accounting for the total Coca-Cola revenue.

This plan to cut the underperforming brands will help Coca-Cola grow and move the available resources to invest in higher-performing products. Coca-Cola’s new plan will also help to make up for the loss of business due to the restaurant closures in response to the coronavirus (COVID-19) pandemic with a decline of 9% in net revenues.