Coca-Cola Revs up Business Model with Freestyle Fountain Machine
In an effort to increase sagging cola sales Coke is testing a new soda fountain with space-age technology and a design by Ferrari.
The highlights of this machine are:
- Designed by the same team which creates Ferrari automobiles
- Dispenses over 100 drink combinations including ones not found in stores such as Diet Vanilla Coke Zero
- Uses micro-dispensing technology found in chemotherapy vs. bulk hoses and syrup boxes. Dozens of plastic cartridges dispense the Coke concentrate. Coke consulting super-inventor Dean Kamen to assist with the design
- Networked to Coca Cola headquarters in Atlanta for diagnostics and reordering
- Includes a touch screen to order and dispense the drink
Excerpt from the Wall Street Journal:
But the new machines have been slowed by complicated technology and costs – Coke charges 30 percent more for the Freestyles than traditional fountains. The machines faced problems early on with heavy usage slowing software and problems with overspill. But 500 revamped machines are expected to be shipped out across the U.S. that are redesigned to accommodate excess spillage and have a fan to melt discarded ice.
Coke holds 70 percent of the U.S. fountain machine market. Coca-cola was first invented in 1886 by Atlanta pharmacist John Pemberton. He didn’t intend to create a fizzy soft drink though. His interest was in making French Wine Coca, a cure-all tonic sold mostly to upper-class customers. French Wine Coca’s main ingredients were Bordeaux wine and coca leaves. And that first glass of coke? Yeah, it cost just 5 cents.
If you’re looking to try out the new Freestyle machines, hopefully you’re in one of the following places: Southern California, Atlanta, Dallas, and Salt Lake City. The company says it wants to roll out the machines slowly. You can find exact locations on its Facebook page.
Is Coke’s business model in trouble? No. Coca-Cola realizes that fountain soda sales are critical to its business model. Innovation with the goal of simply maintaining the large market share makes good business sense. By the same token, Coke knows that business model innovation is necessary or their 70% market share could shrink. Whether this high-tech soda fountain is a commercial success or not, Coke’s attempt at business model innovation will pay off in the long run.
