Thursday, March 17, 2016

Coca-Cola's Distribution Network Gets Fairlife to Local Stores

In its quest to broaden the product mix beyond carbonated soft drinks, Coca-Cola has either purchased or created popular non-soda brands like Minute Maid and Simply juices. Now it's the distribution partner of Fairlife, which produces "ultra-filtered" milk that's lactose-free and filled with protein and calcium.

Fairlife products take aim at the fast-growing niche for nutritious beverages that are convenient, tasty, and familiar. These aren't disruptive in the sense that they don't require new consumer behavior. However, they are premium and therefore the brands need to explain their benefits. Consumers won't pay the higher price unless they understand why Fairlife believes its products are competitively superior to traditional milk (and non-milk) products.

Fairlife needs more than a good product and persuasive, informative marketing. As one of the founders observes: "We had everything except the structure to get it to consumers in every corner of the country." The partnership with Coca-Cola gives Fairlife access to the beverage giant's well-developed distribution network, so consumers will find the product in their local stores.

Consumption of traditional milk products has been slowing, but specialty milk products are on the rise. Fairlife's widespread distribution gives it a fighting chance to capture a goodly portion of the ever-larger consumer appetite for specialty milks that deliver both more (better nutrition, for instance) and less (no lactose, little fat, etc).

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