Small Package. Big Idea. (Craig Douglass On Consumers)

Craig Douglass

I like Diet Coke. A lot. I used to drink Tab before the introduction of Diet Coke, and then spun off to Diet Dr Pepper, which I fondly referred to as a “DDP.” But Diet Coke won me over years ago, and I am a near-daily repeat buyer.

With posthumous apologies to the late Andy Warhol, a Diet Coke can is not necessarily art. But it does have certain design features — or package credentials, as marketers would call them — that reinforce the purchase decision, support the overall experience with the product and facilitate loyalty to the brand.

These days, you no doubt have noticed a relatively new Coca-Cola can, much smaller than the 12-ounce package. That’s the size consumers became used to as the result of a 1955 test-market program for export to American military personnel stationed overseas. (The 1955 can followed a 16- and 32-ounce cone-topped can developed in the mid-1930s, which carried the slogan “canned specially for use at home and on outings.”)

The Diet Coke I now purchase is packaged in a mini can containing 7.5 fluid ounces of the secret formula. This size was debuted on supermarket shelves in December 2009, but is just now getting widespread attention as a packaging and pricing strategy designed to boost the Coca-Cola Co.’s bottom line.

Here’s the deal:

Smithers Pira, regarded as an expert on consumer packaging, suggests there are five current trends in packaging. They are sustainability, health, convenience, trust and cost. So here I am looking at the 7.5-ounce Diet Coke can, which contained the recently sipped elixir, and wondering how it measures up.

Sustainability: Without too much research, it’s clear the company has been involved in recycling for a number of years. In fact, it’s currently running recycling commercials in movie theaters tracing the reincarnation of the company’s packaging. And this past Earth Day, the company announced a Green Team made up of employees at Coke’s headquarters in Atlanta assembled to integrate sustainability strategies into the company’s manufacture, distribution and recycling policies. On the can is a noticeable “Please Recycle” icon under the “Nutrition Facts” box.

Health: There are concerns about diet sodas containing aspartame, many of which seem to be unfounded, but questions exist nonetheless. Diet Pepsi recently announced it was removing the artificial sweetener from its product, stating the ingredient is the reason sales of diet sodas have been declining. We don’t know about that, but we do know recent package downsizing has been in response to health concerns regarding sugar consumption by children and adults alike. Smaller can sizes of non-diet sodas responded to obesity studies, and the diet category followed their lead. (See the real reason why diets downsized, below.)

Convenience: Studies show consumers want smaller and lighter packaging and individualized portions, to make mobile consumption easier. Reese’s Pieces anyone?

Trust: Do you trust the Coca-Cola Co.? After all, it’s “the real thing.” Very active social media presence has been focused on the connection between the company, bottlers and consumers. And the repackaging efforts appear to be in response to consumer desires. Plus, the dominance of the brand itself, its ubiquitous presence, promotes strength, integrity and confidence.

Cost: This measuring stick is another matter altogether. When it comes to the 7.5-ounce Coke can, diet or full-sugary-strength, there is a real pricing and profitability strategy at play. Over the past year, Coke has been reporting flat sales of its 12-ounce can, as well as its 2-liter plastic bottles, based on Nielsen store-scanner data. At the same time, the mini-can package of Coke has increased dollar sales right at 9 percent. And here’s the real reason behind the package: profitability. While the smaller can represents roughly a quarter of the overall packaging mix, it is producing significant net return. According to the company, a 12-ounce can of Coke, sold in a 12-pack, costs an average of 31 cents per can. The 7.5-ounce can, sold in an eight-pack, is priced at 40 cents a can. You do the math.

So while Coke would like to teach the world to sing in perfect harmony, the company is also in business to make money. And that’s OK with me too.

Craig Douglass is an advertising agency owner and marketing and research consultant. He is president of Craig Douglass Communications Inc. of Little Rock. Email him at Craig@CraigDouglass.com.