Coca-Cola Benefits from IoT

AACSB Standards: Global

The Coca-Cola Company leads a worldwide franchise system builton the foundation of local bottlers. Its many flavors of Coke—plusFanta, Powerade, Dr. Pepper, and Sprite—are worldwide favorites.Collectively, Coca-Cola has more than 100,000 employees in theUnited States, nearly 70 independent Coca-Cola bottlers across theUnited States, and another 225 bottling partners worldwide.Coca-Cola manufactures and sells concentrates, beverage bases, andsyrups to the bottlers. It also owns the brands and is responsiblefor consumer brand marketing initiatives.

Coca-Cola bottling partners work closely with local businesses,including amusement parks, convenience stores, grocery stores,movies, restaurants, and street vendors, to12410_ch08_hr_290-310.indd 307 6/10/20 7:14 AM execute localizedstrategies developed in partnership with Coca-Cola. These outletssell Coca-Cola brand soft drinks to consumers at a rate of morethan 1.9 billion servings a day. This approach has enabledCoca-Cola to create a global reach with a local focus.

In recent years, Coca-Cola has been developing intelligentIoT-connected coolers that provide data that the company hopes willimprove productivity and boost sales at local outlets. Theserefrigerator units, which vend and dispense Coca-Cola products,establish secure network connections to a cloud-based IoT platformover which the data can be processed and analyzed. The coolers,which Coca-Cola first tested in Bulgaria in 2015, are currentlybeing tested in smaller retail chains in Chicago and Dallas, andthey are expected to provide the company, bottlers, and retailersseveral benefits.

An IoT-connected cooler captures and reports data such asproduct temperature, compressor cycles, and power consumption thatcan be used to trigger preventative maintenance and avoid cooleroutages. For example, retailers can identify a compressor that isrunning continuously and work to quickly resolve the issue. Datafrom the IoT-enabled coolers will also identify the busiestlocations and most popular drinks, helping retailers to accuratelyset inventory levels and calculate machine profitability. Camerasand sensors can monitor cooler door openings and product movementto optimize sales. For example, retailers may discover that twolarge single-door coolers had less combined activity than one smallsingle-door cooler. Connected coolers will also allow retailers todetect changes in shopper patterns that can be linked to dailysales figures, promotions, and changes in cooler location ortemperature.

The Coca-Cola Company has partnered with technology firmsAirWatch, SAP, and Salesforce to pilot the use of these coolers inselect markets. Coca-Cola is purposefully starting slowly, rollingout parts of the program, including training sales teams, to ensureit gets the right data flowing before expanding more broadly. Pilotsuccess will be determined by the ability of the connected coolersto help with preemptive equipment maintenance, stock optimization,and personalized customer communication.

Coca-Cola Hellenic Bottling Company (Coca-Cola HBC) is one ofthe world’s largest bottlers for The Coca-Cola Company. It hasoperations in Russia, Nigeria, and 26 countries in Europe, servingroughly 595 million consumers. Coca- Cola HBC is taking a much moreaggressive approach to rolling out connected coolers by partneringwith Atos Codex (a European IT services company), eBest IoT, andMicrosoft. By the end of 2018, Coca-Cola HBC had deployed more than300,000 refrigeration units. By adding IoT sensors and cameras tocoolers, artificial intelligence software can process the datareceived from the sensors and cameras in real time and thenrecommend processes to streamline stocking, identify failingcoolers, improve asset optimization, and predict inventory levels.Coca-Cola HBC’s sales increased by 10 percent as a result of thepilot project.

Smart coolers also enable proximity interaction with the use ofmobile apps, enabling Coca-Cola HBC to engage with customers inreal time, such as offering customized offers and near-mepromotions. In the long term, Atos predicts, the technology willconnect Coca-Cola HBC’s entire fleet of 1.6 million coolers.

Critical Thinking Questions

1. How might The Coca-Cola Company and/or its bottlers useconnected coolers to engage with customers in real time? Whatadvantages might this capability provide?
2. The many Coca-Cola bottlers worldwide may employ differenttechnology partners and different technology solutions to implementthe connected coolers. They are likely to rollout the technologyover different timeframes. Will this lack of standardization hinderthe success of this initiative?
3. Is there a need to share the data collected from the variousbottlers? What issues might arise in attempting to share thisdata?