Prepared Foods December 12, 2005 e-newsletter

The Coca-Cola Company announced it will launch Coca-Cola Blak in January in France, the first of several countries -- including the U.S. -- expected to introduce the new cola-coffee beverage in 2006.

Coca-Cola Blak is “an invigorating and stimulating blend that has a perfect balance of the effervescent taste sensation of Coca-Cola and natural flavors, with real coffee.” The lightly carbonated, mid-calorie beverage is designed to appeal to adult consumers.”

"Coca-Cola Blak is not just a flavor extension. It is a blend of unique Coke refreshment with the true essence of coffee and has a rich smooth texture and has a coffee-like froth when poured. We believe we have created a new category of soft drink -- an adult product in a carbonated beverage -- and a whole new drinking experience. This brand is ideal for any part of the day when people are looking for renewed energy or simply to take a break," said Marc Mathieu, vice president, Global Core Brands, The Coca-Cola Company.

The launch will be supported by television, print, outdoor and in-store communication. Global advertising and creative for the brand is currently under development.

The announcement was one of a series from Coca-Cola. The slew of innovations and packaging, along with a new marketing slogan, will help drive the company's previously forecast volume and profit growth, says Coke's chief executive Neville Isdell.

Coca-Cola, which has struggled for five years to boost sluggish soft drink sales and meet changing consumer tastes, said it still expects earnings-per-share growth in the high single-digit range. Coke also stood by an earlier forecast for long-term annual operating earnings growth of 6% to 8%. Isdell said the company would likely pursue more “bolt-on” or smaller geographic acquisitions in 2006. Chief financial officer Gary Fayard said Coke plans to spend $2 billion to $2.5 billion on share repurchases.

Coca-Cola discussed plans for new carbonated and non-carbonated drinks and for attractive packaging in the form of colorful 200ml aluminum bottles, during the presentation.

Also during the presentation, Coke marketing chief Mary Minnick said Coke was introducing higher-margin extensions in the fast-growing water category and plans to launch a Tab energy drink targeting women. Minnick also announced the company's new advertising slogan: "Welcome to the Coke Side of Life."

Coca-Cola has introduced several diet and reduced-calorie drinks in recent months to meet changing consumer tastes. It is also now packaging Coca-Cola in an 8.4oz can and touting the serving has just 100 calories, Minnick said.

The company unveiled a new advertising campaign expected to debut in North America during the 2006 Winter Olympics that will promote wellness and showcase its broad line of drinks. The wellness campaign comes amid obesity concerns in the U.S., particularly among children.

Some industry watchers have said Coke fell behind competitors such as PepsiCo since it held off from acquisitions and took fewer risks with innovative products.

"They need an acquisition so that they can channel capital into something other than bolt-ons," said Douglas Lane, president of Douglas C Lane & Associates, which holds 600,000 shares of Coke. "Pepsi shares have outdone Coke's because they have taken the risk."

Coke's shares have fallen about 17.5% since Isdell became CEO in 2004 and are 52% off their lifetime high in July 1998. By contrast, rival PepsiCo's stock has soared 57% over the same period.

Further joining the Coca-Cola stable may be a line of ready-to-drink coffee under the Godiva brand name in the second half of 2006, according to industry speculation. Spokesmen at both Coke and Campbell Soup Co., which makes Godiva chocolates, refused to confirm or deny the report.

At an investor conference in New York, Mary Minnick said the company intends to launch "indulgence coffees" in North America next year.