- By the end of this month, Coca-Cola will discontinue its Odwalla juice business and divest its refrigerated trucking network that it uses to deliver the beverage, The Wall Street Journal reported. This move will cut 300 jobs.
- Discontinuing its trucking network will rid the company of 230 trucks. The trucks also transport Simply orange juice and single-serve packages of Fairlife milk, which the company will continue distributing through alternative routes.
- Odwalla has "endured ongoing financial challenges," a company spokeswoman told the Journal. "... we couldn’t make it work, we couldn’t figure out the cost-effectiveness of it."
When Coca-Cola bought Odwalla for $181 million in 2001, the company was working toward expanding its stake in premium chilled juices. Today, premium juices are no longer the original "from concentrate" mixtures that populated refrigerator cases in the early 21st century. Now they are cold-pressed, fresh and full of functional ingredients.
Although Coca-Cola has worked to update its Odwalla brand to suit the times — including launching a smoothie and kombucha blend line as well as a zero sugar option, moving toward pure squeezed juice in lieu of concentrates, and even updating its bottles to look more like its cold-pressed rivals — it has done little to help boost the brand.
Even with a trendy positioning, juice sales have been squeezed for growth as consumers turn away amid rising concerns about the sugar content of fruit juice and its links to health problems such as obesity and heart disease. In 2017, U.S consumers consumed the lowest amount of fruit juice per capita, 5.2 gallons, since the USDA started tracking the number in 1970.
This shift away from juice did not bode well for the Odwalla brand, which offers an array of smoothies and juices, some of which, like Mango Tango, have a whopping 58 grams of sugar in a 15.2-fluid-ounce bottle. Not only is overall demand for these sugar-laden beverages reducing, but according to Euromonitor International data cited by the Journal, Odwalla ranked No. 7 on the list of drinks in U.S. retail stores that are made with not-from-concentrate juice.
With more than 500 beverage brands in its portfolio, Coca-Cola decided to ax this under-performing one. By selectively offloading this brand, Coke is freeing up resources to reinvest in brands that are profitable and are rising at a faster clip.
This legacy juice brand is not the only one that has been on the chopping block in recent years. In 2018, Coca-Cola unveiled its "zombie brand" strategy where the company identified products that have failed to grow over a three-year period and culled them.
The process began with the multinational’s Middle East and North Africa business unit, where the company has identified 125 underperforming SKUs for elimination and has already discontinued 60% of them. Odwalla is one of the biggest brands Coke has discontinued.