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Coca-Cola piloting Swiss sparkling water in Atlanta

Eric Mandel 
Coca-Cola is looking into a partnership with Valser water, a Swiss company.
Source: Coca-Cola Company

Coca-Cola is gauging interest in a potential newcomer to its U.S. sparkling water portfolio with a pilot project in Atlanta.

The Coca-Cola Co. (NYSE: KO) hosted a tasting of its Valser water at Kevin Rathbun Steak on Thursday, pitching it as "America's first taste of Switzerland's finest water." It's part of a one-month campaign being tested at restaurants around the Big Peach.

Coca-Cola acquired Valsar in 2001 and its "made by mountains" marketing has proven popular in Switzerland. Meanwhile, imported premium sparkling water is the fastest-growing segment of the bottled water category.

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The testing comes after the Atlanta beverage giant ditched its typical research and development formula by using a crowdfunding platform, San Francisco-based Indiegogo Inc. The Coke team steering the Indiegogo test are part of an "Atlanta-based innovation team" focused on faster feedback.

"Given how rapidly consumer tastes are changing, our team is challenged with taking risks, testing, iterating and cycling through ideas quickly to see what works," said Dave Preston, vice president of innovation for Coca-Cola North America, on the company's website. "We saw Indiegogo as an opportunity to quickly get Valser out there and see if there is a demand."

Preston said his team is considering similar tests with other brands from Coke's global portfolio.

While net revenues were down 8 percent, to $8.9 billion, in the company's most recent earnings report, the company's no-sugar sparkling soft drink portfolio accelerated from the first quarter, with a 7 percent retail value growth.

It's a growing, and competitive, category, and the company has generally leaned on its Venturing & Emerging Brands unit to acquire companies that can reach the ever-important millennial demographic. No acquisition was bigger than its $220 million acquisition in October of Topo Chico, one of Mexico's most popular sparkling waters. In the first quarter of 2018 – the company's first full quarter of ownership – Topo Chico's distribution in convenience stores increased by 25 percent.

Coke has also added a variety of new flavors to existing water brands, including for Dasani and its coconut water, Zico Coco-Lixir.

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Key Points
  • Coca-Cola reports second-quarter earnings and revenue that beat analysts' expectations.
  • Coke has been focused on globalizing its brands, like Coca-Cola Stevia No Sugar and dairy-free smoothie brand AdeZ.
  • Coke clocked the strongest organic sales growth in Europe, Middle East & Africa and Latin America, while organic sales in North America dropped 1 percent.