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Coke plans to kill its ‘zombie’ brands. What does that mean?

Coca-Cola has a new plan for dealing with some brands under its banner

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In this Nov. 3, 2004 file photo, bottles of Mexican Coca-Cola fill a prominent spot on the shelves of the Tarascas Latino Supermarket in Lawrenceville, Ga. Americans who buy the glass bottles of Coke exported from Mexico may have been dismayed by recent o

In this Nov. 3, 2004 file photo, bottles of Mexican Coca-Cola fill a prominent spot on the shelves of the Tarascas Latino Supermarket in Lawrenceville, Ga. Americans who buy the glass bottles of Coke exported from Mexico may have been dismayed by recent o

Ric Feld, Associated Press

Coca-Cola plans to kill off some of its “zombie” brands, eliminating parts of the company that are walking but dead in the water.

What’s happening:

  • Coke CEO James Quincey said in an earnings call Tuesday that it will slowly kill off brands that aren’t growing to help cut costs for the company, CNN reports.
  • Coca-Cola has spent the last year embracing its best-selling brands. This is a significant step toward full embracing that method.
  • “We are shifting to prioritizing fewer but bigger and stronger brands across various consumer needs,” Quincey said. “At the same time, we need to do a better job nurturing and growing smaller, more enduing propositions and exiting some zombie brands.”
  • Coca-Cola has more than 400 brands under its banner. More than half of those have “little to no scale,” which means sales represent less than 2% of the company’s value. Some of these companies will be slowly phased out, according to CNN.

Coca-Cola responds to COVID-19

  • All of that said, Coca-Cola has faced some earnings issues during the novel coronavirus pandemic. Coca-Cola has seen its earnings fall 33% because of the pandemic, per CNBC. This is mostly due to restaurant closures and lack of demand for soda at venues where you’d typically see it, like sporting arenas, concert venues and more.