Coca-Cola is deploying a new self-serve beverage dispenser to offer consumers greater choice as soft-drink sales remain flat and the popularity of specialty drinks skyrocket.
Coke’s Freestyle is a fountain dispenser that features 106 varieties of beverages, including derivatives of the classics. For example, consumers can get a Sprite with raspberry in a creation that only exists on this platform.
The Freestyle is not a kiosk and does not accept payments but it includes a touch screen that allows consumers to choose among the beverages or to create their own drink mix. Coke has aggressively tested the product in Quick Service Restaurants (QSRs), possibly leading to further kiosk self-serve in this sector.
“If you look at our company’s portfolio, self-service is a big share. We went from having one brand in 1986 to more than 3,000 products around the world now. But on the self-service side, our dispensers went from having one brand in ’86 to six now. We had to change that,” said Gene Farrell, vice president of Coca-Cola’s jet integration program.
The Freestyle project, in the works for five years, last year moved to its “Beta Market Test” phase, and Coke deployed 72 machines in 43 locations around Southern California and Atlanta.
This year, Coke moved to the “Pilot Phase” with more than 125 locations in four markets, including Taco Bueno, Schlotzsky’s Deli, Cici’s Pizza, Wendy’s, Stevi B’s Pizza, Popeyes Louisiana Kitchen, Five Guys Burgers and Fries, Burger King, Subway, Qdoba, McDonald’s, Jack in the Box, El Pollo Loco and many more.
The company’s goal is to have the Freestyle in 15 markets by the end of 2010.
“Beyond that, in 2011, we’re planning for continued expansion and broader geographic reach. The number one question we get is ‘when is it coming to my town?’ So, our consumers seem to really have fun with the experience,” Farrell said.
Consumers aren’t the only ones who benefit from the technology. The equipment measures its use every day and reports back to Coca-Cola so the company is better able to understand, and respond to, demands.
“We know what is sold by daypart every day, which is a huge value. We learn from that information and we can plan to use it to better market our customers’ beverages and identify trends,” Farrell said.
Another benefit for operators is the equipment’s ease of maintenance. Traditional dispensers require a 5-gallon bag-in-the-box for each flavor, but Freestyle uses high concentrate ingredients, which allows for precise control of liquids.
The testing phases have not gone without hiccups. One of the biggest challenges thus far has been with the ice receptacle.
“The way consumers use ice with the Freestyle versus the traditional dispensers is something we didn’t consider initially. There is a big difference,” Farrell said.
For example, most consumers simply refill their drinks with traditional dispensers. But with Freestyle dispensers, they want to try something new each time.
“They pour out their ice and get fresh ice much more, so we had to alter the design of the equipment to accommodate a larger dumping point. It was a phenomenon that didn’t previously exist,” Farrell said.
As Coca-Cola continues this roll out, it is also in the fledgling stages of testing a similar piece of equipment that can be managed by restaurant crews so the Freestyle is available in drive-thru components. That means staff could be mixing the drinks, and that could change the flavor. So Coke is determined to ensure the Freestyle technology keeps flavors uniform.
“If a crew member is mixing up a drink by adding shots by hand, it creates a different composition each time, and consumers know the difference. But this machine will get it right every time,” Farrell said.
Coca-Cola is also figuring out its marketing approach for the Freestyle, knowing brand mixes are going to be different for each customer.
“We’re not ready to talk about our advertising plans yet, but there is a lot of marketing potential with this,” Farrell said. “If you think about the capability this presents, it can get exciting. (Restaurants) can do menu pairings or integrate flavor combinations with consumer experiences. They can really have a lot of fun with this.”
To offset increased costs of the equipment, Coca-Cola is suggesting restaurants sell drinks for 10 cents more. “In our research, we’ve found that consumers will gladly pay 10 cents more for this,” Farrell said. “They’re going from six options to 106 – they’re getting a great experience and a major increase in variety.”
