Coca-Cola Co. (NYSE:KO) will close down its smoothie and juice brand Odwalla end of this month. The company is shutting the Santa Cruz business because of the rapidly changing market place.
Odwalla shut as fewer people take smoothies nowadays
John Hackett, the company’s Minute Maid business division President, stated that despite making every effort to continue production, they have been forced to shut the brand. Over the past several years, Coca-Cola has been assessing the business that it acquired in 2001. A company spokesperson indicated that the decision to shut the business was not as a result of the COVID-19 induced downturn. The spokesperson explained that nowadays, health-conscious customers are not that interested in smoothies as it was in the past.
Hackett stated that this decision comes at a time when the company is evaluating where to enhance efficiencies in its operations and businesses. Wall Street Journal first reported the decision, at a time when companies are slashing on product offerings because of the COVID-19 pandemic. Firms are cutting back so that they can focus on making operations efficient and meet the increasing demand for popular products.
Coke refocusing on core products and brands
This is the same tactic that Coke CEO, James Quincey, highlighted in April in a conference call. Quincey stated that the company was looking to enhance system efficiency by prioritizing delivery of key brands and core products. He explained that if there is less complexity in the supply chain, the company can have greater chances of succeeding. The CEO noted that during the onset of the pandemic, the focus on large brands such as Coke Zero, Minute Maid, Coke, and Simply proved beneficial to consumers. The company cut on fringe products because there was a surge in demand for some core products.
Odwalla products were being delivered to retail locations through a fleet of around 230 refrigerated trucks. This is among complications the company is facing, and it is also shutting the supply network.