MIR talks to Stan Sthanunathan, Vice President of Marketing Strategy and Insights, Coca-Cola Company

MIR: Stan, thank you for taking the time to talk to me. Let me start by asking you how the current economic environment has affected Coke. Do people view Coke as a discretionary item that they can avoid buying during tough economic times, or do they think of it as a small luxury to relieve stress in difficult times?

STAN STHANUNATHAN: I believe that everyone looks for small moments of happiness. And items that can provide that happiness, but which are expensive in nature, are the ones that usually get knocked out of the portfolio of things that people buy. As you said, Coke is an affordable luxury, and it is therefore relatively more recession-proof than a lot of other brands. The need for happiness is always there and the brand fits in perfectly.

MIR: So you have not seen any significant dip in your sales or revenues as a result of the economic downturn?

STAN STHANUNATHAN: In certain pockets, yes. But is Coke in the kind of category that would be cut like an IT budget? No! You don’t see that kind of dramatic impact, but you do feel certain effects. What we have seen is a change in pack mix more than anything else.

MIR: In what way?

STAN STHANUNATHAN: When people stay at home, they still want to enjoy good entertainment. They might dial for a pizza, or they might cook meals at home, but they still need something to go with it. So, instead of going to a restaurant and ordering a medium priced or an expensive meal and ordering a drink with it, they have the meal at home, and they still need the drink. Therefore, they tend to buy multi-serve packs and multi-packs.

MIR: Some companies, such as Procter & Gamble, introduced “basic versions” at cheaper prices to manage their brands during this tough economic environment. Has Coke done anything like this?

STAN STHANUNATHAN: No, we haven’t done that. There is one version of Coke. If you go back to what Andy Warhol said many years back, it is a great equalizer—John Kennedy had it, Marilyn Monroe had it, the man on the street has it, and a Coke is a Coke is a Coke.

MIR: The other environmental force that may have had some impact on Coke is the increasing health consciousness among consumers. For example, some schools in the US are banning soda drinks in school vending machines. What has been Coke’s reaction to this?

STAN STHANUNATHAN: Our stated policy is very clear. First, we are in the business of providing choice to consumers, and it is the choice of a whole range of beverages. They choose the beverage that suits their needs and lifestyle the best. Second, health and wellness are not a one-dimensional problem. There is an input and an output issue. And if you don’t manage both ends, you end up taking one side or the other, which is not a solution to the problem.