How the World’s Most Iconic Brand Was Saved From Itself

Coca-Cola had approached Turner Duckworth seven years ago about redesigning the packaging for the marketer’s flagship brand, but the firm’s co-founder harbored doubts he could do good work and didn’t want to hurt his company’s reputation or staff morale. Wieden, whose agency already worked on some other Coca-Cola brands, was more blunt in his hesitation a year earlier, telling Coke marketing exec Pio Schunker he thought the brand’s advertising was terrible and needed to get back on track.

In the biggest surprise, the client agreed.

“Certainly at that point, our creative really didn’t have much value to it because it wasn’t very good across the board,” says Schunker, now svp, head of integrated marketing. “We were looked at as a money machine. An agency came to Coke because it was a great name to have on the door and it was a great paycheck. It wasn’t like you came to Coke because we were known for doing ground-breaking creativity.”

Schunker, who joined Coca-Cola in 2003 from Ogilvy New York, and then-North America CMO Katie Bayne knew they had to convince potential marketing partners that attitudes were changing at the beverage giant known more for watering down inspired ideas than producing them. Coke needed to get back into the cultural conversation, to become more relevant and modern to appeal to a new generation while retaining an emotional bond with older consumers. “Knowing that creativity could impact our business, we set out to work with the best agencies,” Schunker says, admitting he knew attracting them wouldn’t be easy. “We had such a bad reputation back then, jumping from agency to agency. In moving forward, we would need to have our agencies challenge our thinking, to let them know they could call bullshit, push back—and we would be receptive to hear that. That didn’t mean we wouldn’t push back at them, but they needed to know we trusted them to try, fail, succeed and innovate.”

That open, more collaborative approach won over W+K and Turner Duckworth, leading them to create some of the flagship brand’s most innovative recent initiatives, work that has Coca-Cola being honored as Cannes Creative Marketer of the Year for 2013. The brand picked up close to 30 Lions at the ad festival in 2012, its most successful haul ever. Outside Cannes, other accolades include the Clio Awards (sister brand of Adweek) this year selecting Coca-Cola for its inaugural Brand Icon Award.

Schunker loves the creative recognition but is just as proud of the business success driven by it. He was brought in to revitalize Coca-Cola’s signature product, a drink that defines the company and has a halo effect on its extensions. Recognition wasn’t a problem—that’s so valuable it’s carried on the company’s balance sheet as an intangible asset. Consumer excitement about Coke was another matter, meaning marketing would have to serve as the secret ingredient to refreshing a drink that hasn’t changed in 127 years.

It seems to have worked. From 2001 to 2006, Coke saw U.S. sales dip, but last year, in a carbonated soft-drink category where sales slumped 1.2 percent (the eighth straight year of declines), Coca-Cola’s sales rose nearly 1 percent, even as arch rival Pepsico fell by 1.5 percent, according to Beverage Digest. (Even more dramatically, in 2011 Diet Coke edged out Pepsi as the industry’s second-most popular soda.) Interbrand, which put Coca-Cola at No. 1 in its 2012 Best Global Brands Report, put its value at $77.8 billion, up 8 percent year over year.

While international sales over the past decade have held up, Coca-Cola’s biggest challenges have been in the contracting North American market. Aside from getting the right agencies on board, Schunker attributes Coke’s turnaround success in its home and largest market to internal support from former CMO Bayne, now president of Coca-Cola’s North American soda business and someone Schunker continues to talk with on a weekly basis.

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