Coke uses Olympics to showcase its Far Coast coffee brand to worldwide audience
VANCOUVER, B.C. — The 2010 Winter Olympics will be an international podium for soft drink giant Coca-Cola Co. (NYSE:KO) to more widely promote its Far Coast brand of coffee and tea, a move marketing experts say is a clever use of its powerful sponsorship status.
The Vancouver event will also mark the first time Coke, a long-time Olympic sponsor, will serve the Far Coast line of hot drinks at a Games, after rolling out the brand in select countries, including Canada and Norway, in recent years.
"It's an ideal venue for Coca-Cola to introduce their new products just simply because there is so much worldwide attention paid to it," said Lindsay Meredith, a marketing professor at Simon Fraser University in Vancouver.
"These guys are worldwide marketers and eventually, I would not be surprised to see this product rolled out in other countries."
Argus Research Co. analyst Erin Ashley Smith said Coke could be using the Olympics as a test market before expanding Far Coast into other countries, including the United States.
"I can definitely see them going more into coffee because they are looking into other channels of growth," Smith said.
Smith said Coke, the world's largest beverage company, is facing dwindling sales of its soft drinks and bottled water as consumers get more health and environmentally conscious.
The hot drink market is a territory Coke has yet to conquer.
Far Coast was launched through a "concept store" in Toronto's trendy Yorkville neighbourhood in September 2006. That store, as well as others in the company's hometown of Atlanta, Georgia, and Singapore, have since closed. Today, Far Coast is sold in more than 200 locations across Canada, including restaurants, theatres and sporting venues.
A Coke spokeswoman said Canada is a test market for the Far Coast brand to determine "the best business model, blends, styles and customer packages prior to expanding the brand to other markets." Coke said it has no expansion plans for the brand, yet.
Not only will Coke be able to serve Far Coast to a global audience at the Games, but the unofficial taste testing will happen in a host city known for its coffee culture.
Vancouver is believed to have more coffee shops per capita than most major international cities, and its not uncommon to see Starbucks locations across the street from each other, or more than one on the same block.
Add to that a host country where Tim Hortons coffee is considered by some as the unofficial national drink.
"You are talking about land of the coffee drinker here," Meredith said.
While Coke faces a lot of competition in Canada, and Vancouver in particular, it will have a monopoly on the Olympic venues as the exclusive non-alcoholic beverage provider to the Games.
Only Coke products are allowed to be served and consumed at the Games, which includes Far Coast coffee, tea and cocoa, as well as its various brands of soft drinks, juices and bottled water.
But that doesn't mean the competition will not try to lure coffee drinkers once they step outside the venues.
Retail analyst John Winter, president of Toronto-based retail consultants John Winter Associates Ltd., said while Coke may have the priority locations, expect chains such as Tim Hortons and Starbucks to beef up their presence during the Games.
"In the huge crowds descending on Vancouver I would imagine they will be handing out special coupons to entice people into their stores," said Winter.
Starbucks wouldn't comment on its plans specifically during the Games, but in a statement through its public relations firm the company said it is "prepared to manage the increased customer traffic."
The company is promising to have staff on hand who speak a variety of languages and can handle the onslaught of foreign customers expected.
Tim Hortons declined to comment on its plans around the Olympics.
Coke also sells cold coffee beverages in ready-to-drink cans, including a brand called Georgia sold in Japan. In the U.S., Coke sells iced canned coffee under the Caribou brand and has a licensing deal with Illy in Europe.
For its well-known cold drinks, such as Coke, Sprite and Dasani water, the company will use the 2010 Games to promote PlantBottle, a new more eco-friendly plastic container made in part from sugar cane and molasses.
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