Coke sought to use Odwalla to expand in premium chilled juices, but the brand’s growth had stagnated.
Photo: Jerritt Clark/Getty Images for OdwallaCoca-Cola Co. is discontinuing its Odwalla juice business and a refrigerated trucking network that delivered fresh drinks to stores, the latest sign of consumer-goods companies narrowing their focus during the coronavirus pandemic.
Odwalla is one of the biggest brands Coke has eliminated. The move will cut about 300 jobs, a company spokeswoman said.
Coke will stop delivering Odwalla to stores by the end of July and will pick up unsold inventory through August, she said.
After several years of assessment on Odwalla’s performance, “we couldn’t make it work, we couldn’t figure out the cost-effectiveness of it,” the spokeswoman said. “It really is the result of consumers changing what they want so rapidly. By freeing up those assets, we can reinvest those costs in what consumers want today.”
Coke’s chilled delivery network includes about 230 trucks, all of which will be sold, the spokeswoman said. Those trucks also carry Simply orange juice and single-serve Fairlife milk. The company will find other routes to market for those products, she said.
Coca-Cola bought the Odwalla brand in 2001 for $181 million and the assumption of about $5 million in debt, in a bid to expand into premium chilled juices. But the brand’s growth stagnated. Last year, it ranked seventh among drinks made from 100% not-from-concentrate juice in U.S. retail stores, according to Euromonitor International.
The smoothie category has declined and the Odwalla brand has “endured ongoing financial challenges,” the spokeswoman said.
Across the consumer-goods industry, sellers of cars, potato chips, toilet paper and beer have been narrowing their offerings since the coronavirus pandemic disrupted supply chains and nudged consumers back to familiar brands. Some companies that already had been looking to eliminate underperforming products are accelerating that process.
Two years ago, Coke’s CEO said he had started issuing quarterly “zombie lists” to the company’s top markets, identifying products that hadn’t grown for three years. Many of them were products with little brand recognition.
“It is more important than ever to evaluate where we can improve efficiencies in our business and operations,” John Hackett, president of Coke’s Minute Maid business unit, said in a statement about the decision to discontinue Odwalla and the chilled delivery network.
Write to Jennifer Maloney at jennifer.maloney@wsj.com
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