Coke Is Learning to Think Outside the Bottle

via Industry Week

As the concept of the “gig” economy continues to gain currency in supply chain circles, helped along by Uber-like startups that offer one-off package and parcel deliveries, the trend has extended into warehousing. Just as you can now hire a driver to pick up and deliver freight of various weights and dimensions, you can also hire temporary staff to manage your inventory or stock your shelves.

One of these under-the-radar startups is Wonolo, which operates off an app that connects companies with potential employees. While the Wonolo name is unknown to most, the company largely responsible for its funding is one of the best-known food & beverage companies in the world: The Coca-Cola Co.

Out-of-stocks are a big deal for consumer goods manufactures like Coke, and the company reportedly loses $1 billion annually in sales due to the difficulty in quickly replenishing its retail customers with fresh stock. That led to Coke’s investing in Wonolo in 2013, a startup that could quickly develop an app that would match workers with employers, based on the latest mobile and logistics technologies.

In 2014, Coke launched The Coca-Cola Founders platform, which operates on a similar premise as the “Shark Tank” TV show by identifying entrepreneurs with ideas that line up with technologies or service models that could prove useful to Coke. In exchange for its providing resources and seed capital, Coke acquires a minority stake in the startups. The key is that the startups are free to pursue initiatives that fully embrace new technologies and business models that might get bogged down were they to be launched through Coke’s traditional, century-old corporate structure.

“Most established companies struggle with the speed and flexibility they need to stay ahead of the digital revolution,” says David Butler, Coke’s vice president of innovation and entrepreneurship. As he notes in his recent book, Design to Grow, “The way startups design everything from their products, to their staff, partnerships, and revenue model enables agility.”

Overcoming Decision Fatigue

Too many manufacturers are afflicted with “decision fatigue,” notes Mike Burnette, director of the University of Tennessee’s Global Supply Chain Institute, and that can have a detrimental effect on their agility and profits. “Coming to work every day and making complex changes to meet the latest product regulations that the consumer does not value on thousands of SKUs can depress the best supply chain talent,” Burnette says.

One way companies can manage this complexity is to apply a standardization strategy known as platform lifecycle management (PLCM) to their supply chains. One company aiming to do just that is snack-food giant Mondelez International, which worked with the University of Tennessee on ways to standardize SKUs, suppliers and supply chain processes. The idea of PLCM is hardly new, dating back at least 90 years to its emergence in the U.S. auto industry.

“Platform management is a simple concept that requires company-wide coordination and adoption,” explains Daniel Myers, Mondelez’s executive vice president of integrated supply chain. “A focus on standardization will drive speed and margin improvement.”

In a UT study sponsored by Mondelez, a global fragrance company used PLCM to reduce 16 different lavender fragrances down to just three, leading to a 15% cost savings. “When companies simplify their offerings, they can standardize their suppliers and processes,” Burnette points out. “That means less time spent on daily business and more time to improve strategies and respond to market influences."

Coke Asks Shops To Pitch Ideas for Next Big Campaign

via AdAge

Coca-Cola Co. has invited 10 roster agencies to pitch ideas for Coke's next big global campaign, which could potentially include ending the long-running "Open Happiness" campaign.

The process began this week in Atlanta and represents the first big agency move under new Chief Marketing Officer Marcos de Quinto. Shops invited span the globe and include David, Dentsu, FCB of South Africa, Martin Mercado, McCann of Madrid, Ogilvy, Santo , Sra Rushmore, The Cyranos and Wieden & Kennedy, Portland.

"We have invited a selection of our key agencies from around the world to bring their best thinking to Coca-Cola in order to create the strongest work for our flagship brand," the company said in a statement to Ad Age. "We are always pushing ourselves and our agencies to deliver world-class creative with global appeal that engages and entertains our consumers and drives business growth. This process will help us harness thinking from some of the best agency minds from around the world to deliver the best possible work."

The pitch comes as the company puts a new emphasis on marketing to help reverse sluggish soda sales trends. A major cost-cutting initiative was recently launched that involves pouring savings back into brand-building. Executives said late last year that the company would add $250 million to $350 million in global media investment in 2015.

Everything appears to be on the table, including moving beyond "Open Happiness," which was launched by Wieden & Kennedy in 2009. "We've got an open mind," said a spokeswoman. It is possible that more than one agency could emerge as a winner.

It is unclear when the new work would go into market. But the new campaign would likely follow recently recent ads that celebrate the 100th year of Coke's iconic bottle. Those ads are showing in more than 100 countries and are expected to run through most of the year in many portions of the globe.

Coke launched "Open Happiness" with major media buys that included "American Idol," the Super Bowl and Academy Awards in the U.S. It was eventually activated globally in over 200 markets and has won multiple awards including over 60 Cannes Lions, according to Coke. The effort was introduced during tough economic times and was meant to position Coke as a simple pleasure.

Pepsi Launches the Creators League as In-House Studio to Be a Little More like Red Bull

Via Variety 

Can PepsiCo become the next Red Bull?

Frank Cooper III, who serves as the soda giant’s chief marketing officer of global consumer engagement, has long championed the power of entertainment as a way to build a loyal fanbase around the company’s brands, including Mountain Dew. Yet while he’s had some successes with one-off projects like Pepsi Max’s “Uncle Drew” saga with NBA star Kyrie Irving and a $50 million deal with Beyonce, Cooper’s looking to produce music, TV shows and Web series through a newly formed internal studio called the Creators League.

One of its first projects is the World Cup-themed “Beats of the Beautiful Game,” a series of musicvideos Pepsi is calling “filmtracks,” directed by Janelle Monae, the Young Astronauts, Spike Lee, Timbaland, Santigold, Kelly Rowland and Idris Elba (see above).

The Challenge: “Everyone in this broader branded entertainment media ecosystem has been trained to think that the brand writes the check and the creative team does what it wants in service of the brand,” Cooper told Variety while discussing his plans for the Creators League. “The trick is to figure out what the brand and creative community can do jointly that benefits both. That’s where I want to play. 

The Overall Goal: “It’s really about pushing the boundaries for content creation and monetization and distribution,” Cooper says. “We’re thinking about new ways to create revenue streams in owning intellectual property.” It’s what Red Bull has done so well with its own brand, producing everything from short films for the web to full-length documentaries that hype an adventurous lifestyle over the sale of its energy drinks. In each case, it’s building a massive slate of content it can distribute through its own digital pipelines and promote through its Red Bulletin magazine and other promotional platforms. “Red Bull has been really smart at being the pioneers,” Cooper says. “Why rent when you can own?”

The Opportunities: “There are constrains in any industry that don’t allow creative people to do what they’re passionate about,” Cooper says. “I’m not trying to compete with a network or studio, but there are gaps within the industry where we can play in,” with Cooper spending less time on films because of “timelines and cost.”

Every Platform Counts: While Cooper is considering a range of platforms to distribute the Creators League’s content, “we think that for short form, mobile will play an increasingly important role for us,” he says. “As we start to get better data on content that we distribute in the digital space, we can get much more intelligence on how to distribute that content online and to broadcast TV.” In addition to hiring a team of developers, freelancers, artists and editors, Cooper is in the process of hiring a data science team. “That’s the secret sauce of this whole thing,” Cooper says.

Re-Think “Branded Entertainment: “I try to think about what we do from the audience’s perspective,” Cooper says. “For the most part they don’t’ really care that it’s delivered by a brand. It must be entertainment first.” While the obvious role is for a brand to sponsor or integrate its products into content, just producing content “is the area that most brands get frightened by,” Cooper says. “They’re say, ‘I don’t see our logos, or our product being consumed.’ The ones that are more courageous are saying this digitally savvy audience is really smart. They get it, they’ll figure it out, and it’s sometimes better for them to figure it out on their own. That’s the ultimate branding — when you’re viewed not so much as a sponsor of entertainment but an active player.”

Lead by Example: “It’s always difficult for a large corporation to march into uncharted territory,” Cooper says. “When you start to see really small companies put out content and generate large audiences with relativity small amounts of money, it changes the way you think. It becomes an easier sell in terms of experimentation. The next step is to move from an experimental phase to long-term commitment. We’ve had successes, but in order to win we need to be constantly in the game.”

Big Data, Big Deal: In addition to hiring a team of developers, freelancers, artists and editors, Cooper is in the process of hiring a data science team. “That’s the secret sauce of this whole thing,” Cooper says.

Changing the Game: New hires like Brad Jakeman, president of PepsiCo’s global beverages group, is a former exec at Activision Blizzard, the world’s largest videogame publisher. That’s “helped a lot” in changing how PepsiCo views entertainment, Cooper says. “The shift that’s happening in the gaming world is creating a lot of disruption. The more people who come in and understand how to work with the creative community directly and distribute content in different ways, it makes my job easier in order to push these boundaries.”

New York State of Mind:  Cooper was caught off-guard by the reaction he got when he set up the Creators League in New York rather than Hollywood. “Everyone I talked to said I was crazy,” he says. “But our headquarters are based here, and there’s a massive amount of talent that’s under-leveraged.”

Why Idris Elba? “We’ve tried to find a range of directors — some that were established directors, some who were music video directors and could tell great stories, others who were young and coming out of the digital space,” Coopers says. “Idris is a DJ and had done some directing. He’s really passionate about soccer, which helps. He’s also adventurous. If you come at him with a new idea and he feels like he’s breaking new ground, he’ll listen.” Elba’s short, featuring R3HAB’s song “Unstoppable,” takes place in the 1970s, and features the soccer skills of Zach Hamilton. It’s the first film from Elba’s new production shingle Green Door Pictures. “He shot and edited it within a week,” Cooper says. (Watch his short below followed by the first from Monae)