Coca-Cola Thinks a Java Jolt will Energize its Business

In 2001, Coca-Cola executive Udaiyan Jatar was tasked with cooking up ways to get the beleaguered soft drink giant into the brewable coffee business. Even then, Starbucks Corp. had the market dominated. And rival PepsiCo Inc. was beating Coca-Cola to the punch with everything from sports drinks to bottled water.

One Friday in September, drummers kicked off a noon parade to herald the newest addition to Toronto's Bloor Street shopping district. Until the end of the day the Far Coast store, a two-story emporium with a vaguely Asian exterior, served up 5,000 free espressos, chai lattes, and hot chocolates.

Far Coast isn't the newest competitor to Starbucks and other cozy coffeehouse chains. Instead, it's Atlanta-based Coca-Cola's splashy way of introducing the world to its new, experimental line of hot drinks. Far Coast store was only for show. Most customers won't get to taste the hot-drink line of coffeehouses or buy the products at supermarkets. Coke is selling machines that make the drinks to outlets like hotels and art galleries, says U.S. News & World Report.

For Coke, the Far Coast brand is a radical departure. The soft-drink maker spent five years trying to simplify fancy cappuccino and tea makers usually run in coffeehouses by trained baristas. The result is a machine that uses pods and has a refrigerated milk container so that any store clerk or waiter can brew beverages by pushing a button rather than measuring out beans and steaming milk. But it does not mean that customers have to keep orders simple-machines use only one type of milk, for example, usually 2 percent. Coke plans to sell or lease the machines to businesses that want to boost their revenue without setting up an entire cafe.

Meanwhile, Coca-Cola has no plans to market the Far Coast brand to the travel catering channel, a spokesperson told gate2board. [Get full story ¦ U.S. News & World Report]

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