Coke is it!

I used to be an avid Pepsi drinker. For me, Coke was a fairly standard, no-frills kind of drink. However, during the last couple of years I've seen with growing admiration the dramatic push The Coca-Cola Company (KO) is making in terms of innovation and outstanding product quality. First it was Coke Zero. Although skeptical at the beginning, it took me a couple of months to try this product; I mean, what could be so different from Pepsi One, anyway? Boy, was it different!! The first taste made me a convert. What a product!! Refreshing, flavorful and yet quite light. This successful introduction was followed by Coke's latest brilliant moves: the launch of Diet Coke Plus -Diet Coke with added vitamins and minerals-, and the acquisition of Glaceau, the manufacturer of the wildly successful VitaminWater line. Both initiatives strongly position the company to fully leverage the already robust -and still growing- consumers demand for healthier, balanced products that support their quest for overall well-being. In the best tradition of a consumer goods leader, Coca-Cola is strongly supporting both products with integrated marketing campaigns across several mediums. Perhaps the best example of advertising at work is VitaminWater. After just a few weeks of closing the Glaceau deal, Coca-Cola launched a vibrant, massive multi-media campaign to support VitaminWater, reinforcing its positioning as a hip, alternative brand for the in-crowd.

All this activity has not gone unnoticed in Wall Street. Coca-Cola share price has increased from around $44 in October 2006 to $54 in late August. While at 24 times trailing earnings the stock is not exactly cheap by historical standards at this point, I think Coke's portfolio strategy is definitely working. The Company is asserting its leadership position in the beverage market through a demonstrated understanding of what the consumers want and, most importanttly, where they are going in terms of priorities and needs. Growth at Coke can only bubble up.