HOT

BRANDS
By Jessica Jacobsen

{NICHE}

COKES VENTURING AND EMERGING BRANDS TEAM

SCANS THE GLOBE FOR BRANDS WITH THE
POTENTIAL TO BECOME THE NEXT BIG THING

ith a portfolio of more than

500 brands offering more
than 3,500 beverages, The
Coca-Cola Co. has expanded
greatly since it poured its
fi rst Coke 125 years ago.
But even with this vast portfolio, Coca-Cola continues
to search for the next big thing, charging its Venturing
and Emerging Brands team to do just that.
The goal is to make sure that Coca-Cola isnt surprised by
trends in the beverage marketplace, and to boost innovation
efforts and find high-potential growth brands, says Deryck van
Rensburg, president and general manager of VEB, which is a
dedicated operating unit of Coca-Cola North America.
This is extremely important to the companys overall vision
and strategy, he says. In the four years since the VEB team
was formed, we have created a portfolio of brands developed
by external entrepreneurs, imported to the US and crafted
from scratch.
For instance, VEB has entered into a global joint venture
with an Italian company to create illy issimo, a high-end
espresso in a can. It has also borrowed from its operations
in France to sponsor Cascal, a naturally fermented soda
in f lavors like black currant and cherry; and Japan, where

JUL11

it repurposed the Japanese Sokenbicha

bicha
tea brand, along with its marketing
ng
and packaging, to appeal to the US
consumer. It also has an equity stake
take
in ZICO coconut water and has fully
ully
acquired Fuze and NOS, which
were incubated to scale and then
graduated to the companys core
business units. In March, Coca-Cola
Cola
fully acquired Honest Tea, which
completes a transaction that began
an
three years ago, led by the VEB unit,
nit,
when the company purchased a
minority stake in the company.
Spotting brands like these involves
research. VEB team members are active
in the marketplace and in absorbing
ng
consumer needs and demands.

Coca-Cola's Venturing and

Emerging Brands team fully
acquired Honest Tea in March.
h.
The unit seeks out niche brands
ds
with high-growth potential.

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33

Led by its VEB unit, Coca-Cola purchased a minority

stake in ZICO coconut water in 2007.

The most important part of the process is being in the market

and networking with cultural leaders, wellness experts and
early adopter consumers, says van Rensburg. We have to
be real-time in the market, staying close to the consumer,
watching what they do, where they shop and what trends they
are following.
VEB also gets inspiration from new entries in retail
channels. We have a group that, each month, visits an urban
environment, goes to stores, engages retailers and collects
all of the products that have been launched in that city, van
Rensburg says. We research each brandbecause every brand
starts small before it becomes big.

I think the reason that Coke

invested [in Honest Tea] is
were really at the center
where a lot of the trends
are, with healthier products
[and] environmentally
friendly products.
The company also attends trade shows, particularly for
natural products, which is what drove the companys interest
in Honest Tea.
The consistently strong growth of Honest Tea, as well as
its leadership in the natural foods channel, was among the
many elements that attracted The Coca-Cola Company, van
Rensburg says. When we made the investment in Honest Tea,
we did so because we saw that it had great potential to be a
significant brand of the future.
Seth Goldman, co-founder, president and TeaEO of
Honest Tea, says that the company has already realized
tremendous growth with the support of Coca-Cola. He says
that, when Honest Tea first began its deal with Coca-Cola,
its products were available in 15,000 accounts, but, now, its
accounts have grown to 75,000 and the brand is on its way
to 100,000.

34

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JUL11

Coca-Cola's VEB unit partnered with Italian coffee company illycafe to launch illy issimo, a line of ready-to-drink
coffee beverages.

I think the reason that Coke invested [in Honest Tea] is were
really at the center where a lot of the trends are, with healthier
products [and] environmentally friendly products, Goldman says.
We expect to continue to grow aggressively in the years ahead.

I appreciate that Coke saw value in our team and our

leadership and what we were doing, he says. They really have
continued to invest in us and our management.

But the value of being part of Coca-Colas VEB business unit

expands beyond distribution.

VEB also appreciates lessons learned from its investments

and acquisitions, such as the natural sales channel force that
accompanies Honest Tea.

We bring a great deal of passion, entrepreneurial energy, [and]

a great deal of knowledge on a natural foods industry, says
Goldman, but for a lot of our team there [are] so many new
dimensions that we dont have expertise in.

When Honest Tea was first created, the management team

knew they needed to get their product to the natural channel,
van Rensburg says. VEB is now able to leverage this industryleading sales team to sell current VEB brands as well.

Goldman says he expects that Honest Tea will benefit from

Coca-Colas depth in marketing and with packaging, such as
the companys bio-based PlantBottle.

Van Rensburg says all of these efforts reflect why VEB has
chosen to invest in entrepreneurs like the team at Honest Tea.
They provide a source of innovative ideas and energy that
enhance our own, he says. BP

Were very excited to have access to that kind of

technology, says Goldman. Thats something we never
would get on our own operating out of our little office in
Bethesda, Maryland.
But, what stands out most for Goldman, now that his
company is fully part of Coca-Cola? He says its the
companys commitment to Honest Teas brand, quality
and authenticity.

JUL11

Jessica Jacobsen is managing editor of Beverage Industry,

www.bevindustry.com. Follow Beverage Industry on
Twitter at www.twitter.com/beverageind.
EDITORS NOTE:
These features were adapted from Beverage Industry's
Coca-Cola 125th Anniversary coverage in June 2011

www.brandpackaging.com

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