Brands are increasingly doing away with the CMO role. A top Coca-Cola exec explains why the company ditched the title and reveals its growth strategy.
- Speaking at Advertising Week, Coca-Cola's chief growth officer Francisco Crespo said the company ditched the chief marketing officer role to focus on growth.
- He also described how Coca-Cola has expanded its portfolio and classified its brands into explorers, challengers or leaders.
- He said Coca-Cola has also become more consumer-centric and innovative in its marketing partnerships, and made sustainability a bigger priority, which is yielding results.
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As people increasingly ditch sugared sodas in favor of healthier beverages, 127-year-old Coca-Cola is trying to become more consumer-centric through new products, e-commerce, and sustainable packaging.
Speaking at Advertising Week in New York, Coca-Cola's chief growth officer Francisco Crespo said eliminating the chief marketing officer role after global CMO Marcos de Quinto resigned was a step in this transformation.
"What we're doing is [that] we're ensuring that brand-building is way beyond just advertising - it's how the brand is executed in absolutely every aspect," he said. "It is basically to remind me that if we don't grow, it's my fault."
Crespo leads Coca-Cola's growth mandate, which includes brand, strategy, design and storytelling, customer and commercial leadership, and strategic innovation.
Coca-Cola expanded its portfolio and reclassified its brands
As it chases bigger profits, Coke has sought to redefine its category, Crespo said. The company has been expanding its portfolio beyond its flagship brand with new products like Coca-Cola Coffee and Coca-Cola Energy in some markets.
"We were stuck in thinking that our category defined our opportunity, and that was a huge mistake because it got us fighting in minor leagues and focusing on the wrong opportunities," he said. "There's huge area to grow across all beverages."
Coke also started classifying its brands into explorer, challenger and leader brands, depending on what stage they are on in their lifecycle and their market caps, instead of looking at them all through the same lens. It has also started getting rid of brands that are a drain on resources and not growing.
"We had been treating a lot of the brands we had in our portfolio with the same logic and the same mindset as we did with Coca-Cola," he said. "And that didn't work, because they are in different stages of their life. They have different problems, they have different challenges."
Coke has focused on healthier drinks and marketing tie-ups
Coca-Cola has also tried to make sure its brands have strong attributes to give them an edge, said Crespo. Coca-Cola is all about optimism and uplifting people, he said, while FairLife is a lactose-free milk whose value proposition is more protein, less sugar.
"Edge has to do with defining the space that you're going to own. At the end of the day, brands have a personality, brands have values, brands are built on a human truth," he said. "If you are expanding your edge, you will be able to capture that in price and in profit."
Crespo has also prioritized partnerships, resulting in limited-edition Coke bottles it created with Star Wars and a partnership with Marvel ahead of the premiere of "Avengers: Endgame," featuring limited-edition Coke cans showing characters from the movie.
Coke has also localized its approach. In China, Coke ran a competition with e-commerce platform JD.com on to provide young, urban Chinese giveaways like movie tickets for their families around Chinese New Year. Its European rollout of Fuze tea included a bubble tea version in the Netherlands.
Coke says its bets are paying off in faster growth
"Getting a lot of countries to do stuff is super important, but allowing for them to find how they customize it is also a very important part of having a success," he said.
Sustainability has emerged as another priority for Coke, with the company pledging to make its packaging 100% recyclable by 2025. It is delivering on that by running ads that encourage people to recycle.
The company's bets are yielding results, said Crespo, with revenue growth jumping from low single digits to high single digits in the first half of 2019 versus a year ago and profit growth in the double digits. Coke is also rapidly gaining share across non-alcoholic beverages, he said.
"We have double the amount of experimentation year-to-date, and over a quarter of our business [is] coming from innovation," he said.