The past five years have been banner ones for Coca-Cola retail licensing. The licensing arm of the world’s largest beverage company sustained double-digit annual sales growth during that period – including a 12 percent jump to $1.3 billion in sales this past year. More than 500 million Coca-Cola brand products are now purchased annually.
“The licensing business has nearly tripled in that time,” says Kate Dwyer, group director of Coca-Cola’s worldwide licensing. “Strong partnerships and geographic expansion have been the strongest contributors to that growth.”
In 2009, North America and Western Europe were the biggest generators of retail licensing revenue for the company, but strong growth in Latin America and Asia has been boosting sales ever since. “Putting time, attention and resources into those areas has paid off,” Dwyer says. Today, international markets account for 70 percent of the licensing business.
In 2011, the division grew a whopping 56 percent, thanks to merchandising for the Coca-Cola Company’s 125th anniversary. The company has another birthday to celebrate in 2015 — which is likely to provide another big lift in sales — the 100th anniversary of the
Coca-Cola contour bottle.
“We’re getting plans in place for all the appropriate product categories,” says Becky Anderson, global licensing manager for North America. “You’ll see graphics of the shape of our iconic bottle throughout our programs.”
Already available is a special glass, which takes design cues from the company’s contour bottle, created specifically by Austrian wine glassmaker Riedel to emphasize the sensory experience of
“Coca-Cola really does taste great in these glasses,” Anderson says. “We’ve been surprised by the overwhelming success of this product. We can’t make enough to keep them on the shelves.”
Drinkware is obviously a key category for Coca-Cola retail licensing. The company has more than 500 beverage brands, including 16 billion-dollar brands, among them Diet Coke, Fanta, Sprite, Coca-Cola Zero, Powerade and Minute Maid.
Through the world’s largest beverage distribution system, consumers in more than 200 countries drink its beverages at a rate of 1.9 billion servings a day. More than 200 million Coca-Cola glasses are sold every year.
The brand dates back to 1886 when Coca-Cola was invented in Atlanta by a local pharmacist. The Coca-Cola logo, which was designed by that pharmacist’s business partner, can be found today on products in multiple categories all over the world. Coca-Cola’s first foray into licensed product was a chewing gum in the early 1900s.
The mission of the company’s licensing business is to design and market branded merchandise that extends the brand experience and connects with consumers. “Our goal is to leverage licensing to amplify our brand messages,” Dwyer says. “Licensing is a key marketing extension for the beverage.”
The licensing team is responsible for setting strategic direction, designing style guides, product development and compliance and approvals. It has a financial department for royalties and expenses and a legal department for agreements with partners.
But with a brand that has so much history and pervasiveness in popular culture, the biggest challenge for retail licensing is to keep the brand hip and relevant. “We have to keep asking ourselves, how can we refresh and reinvent?” Dwyer says.
What better way to do that than through the ultimate trendsetters: fashion designers.
Drinkware and accessories, such as coasters and bottle openers, and tabletop products only account for about 15 percent of the company’s licensing business. Apparel and related accessories make up 65 percent of the business. Apparel is the biggest category in the licensing industry as a whole.
Coca-Cola has inspired designers and artists going back to Andy Warhol’s famous interpretation of the brand in the 1960s. In the 1980s, Tommy Hilfiger designed a rugby shirt with the Coca-Cola logo. Notable past fashion collaborations with Coca-Cola have included Dolce and Gabbana and Jack Spade.
Two Coca-Cola-licensed collections hit the runway this past fall, closing New York Fashion Week with a new line from designer Marc Jacobs and opening London Fashion Week with a line from Ashish Gupta.
The collections were created through collaborations between the designers and the Coca-Cola licensing team, which has also formed partnerships with other global fashion designers, such as Jean-Charles de Castelbajac, Nigo and Arzu Kaprol.
Jacobs, an American fashion designer known for his modern take on vintage, created a Victorian-inspired line. Gupta, a London-based fashion designer known for his East-West fusion, mixed sportswear and glamour in his collection.
“I am interested in drawing light to Coke’s unique global appeal, a Western pop brand phenomenon that is equally popular in the East,” Ashish has been quoted by the company as saying. “I’m just always inspired by American pop culture, and
Coca-Cola is kind of the biggest brand. I just love how the logo has been used so much – Andy Warhol and everyone – it’s such an iconic thing in itself.”
Also this past fall, Coca-Cola licensing partnered with fashion designer Dr. Romanelli, known as DRx, to create a 200-piece collection with reconstructed vintage Coca-Cola clothing.
While consumers are at the nail salon flipping through the latest fashion magazines and seeing all these runway styles, they can also style themselves with the Coca-Cola brand – with a new nail polish collection by OPI.
OPI, the world leader in the professional nail care industry, provides high-quality products and services to salons and their customers in more than 100 countries. It’s known for its fashionable colors and clever, quirky names, and it regularly launches collections with fun themes.
Other 2014 OPI collections include the Ford Mustang 50th Anniversary, Fashion Plate, Neon Brights, Brazil, Sheer Tints, Muppets Most Wanted, Spotlight on Glitter and Gwen Stefani.
“OPI nail polish is something every person can have fun with – getting your nails done is simple and easy. It’s accessible beauty,” Anderson says. “Coke and OPI are two icons of happiness.”
Several of Coca-Cola’s most recognized brands, including Coca-Cola, Diet Coke, Coke Zero, Cherry Coke, Vanilla Coke, Sprite and Fanta, will be the inspiration for the collection that will launch internationally in May 2014.
The always-creative nail polish names for the OPI Coca-Cola collection are: Coca-Cola Red, You’re So Vain-illa, Get Cherried Away, Green on the Runway, Today I Accomplished Zero, A Grape Affair, Orange You Fantastic, Sorry I’m Fizzy Today, My Signature is DC.
Dwyer says the company is excited to partner with OPI because of its global reach and influence among Coca-Cola’s core target teen audience. “Coca-Cola has a long history of collaborations with beauty and lifestyle brands to further connect with consumers and tastemakers in a way that is meaningful and relevant for them,” she says.
“Our first filter in picking partners is optimism – the brand must be optimistic,” Dwyer explains. “It has to fit with our sensibilities and personality, reflect our values and be relevant to our core customer.”
Licensing agreements usually last three to five years – shorter if it’s a first-time partner – for the good of both parties, to make sure it’s a good fit, according to Dwyer.
Use of brand images, logo and name must go through a three-stage approval process of concept, prototype and final to make sure it’s consistent with what Coca-Cola wants to portray in the marketplace. And prior to the approval process, style guides are provided to partners and licensing designers assist them with initial ideas.
“We’re always looking into new categories,” Dwyer says. “But we are very strategic in our approach. We have to make sure there is strong alignment. And it’s a priority for us to fuel existing categories with innovation.”