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Coca-Cola's (KO) Deal With Hard Rock to Expand Customer Base

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The Coca-Cola Company (KO - Free Report) recently announced a partnership with Hard Rock International. The collaboration is aimed to introduce Coca-Cola's beverage portfolio to Hard Rock Cafes globally, beginning in 2020.

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The partnership between this beverage giant and the iconic entertainment, hospitality as well as dining company will likely provide immense growth opportunities.

We note that, Coca-Cola commands a solid portfolio of more than 500 sparkling (carbonated) as well as still (non-carbonated) beverages like water, enhanced water, juices and juice drinks, ready-to-drink teas and coffees along with energy and sports drinks. Moreover, Hard Rock International has a far-reaching presence in about 76 countries with owned/licensed or managed Hotels, Rock Shops, Casinos and Cafes in 262 locations.

With this partnership, guests at Hard Rock cafes can club orders of burgers and others with their Coca-Cola drinks.

Other Growth Drivers

Coca-Cola continually maintains relevance for the Coke brand in the evolving beverage industry through updates to the flagship product and its many variants. To this end, the company continually innovates as well as invests in core categories and brands. This mantra extends to all business aspects, ranging from massive categories like hot beverages to emerging ones like Kombucha. Constant innovation of brands is the key to the company’s sustained growth. Notably, the company’s Coca-Cola Zero Sugar has delivered double-digit growth globally for the eighth straight time in third-quarter 2019.

This apart, Coca-Cola has recognized that the modern consumer is looking for more variety than just the original carbonated beverage. This recognition led the company to expand its beverage portfolio to include teas, juices, sports drinks and other products.

To this end, the company closed a $5.1-billion takeover deal of the British coffee chain — Costa Coffee — earlier this year. The buyout included the coffee company’s roastery, roughly 4000 retail outlets, coffee-vending operations and at-home coffee products. Additionally, the company launched Coca-Cola Coffee Plus in more than 20 markets, which is driving growth in international markets.

Wrapping Up

We believe that, Coca-Cola’s focus on enhancing brand portfolio through strategic partnerships and innovations will expand customer base and propel innovation in the beverage industry. Markedly, this Zacks Rank #3 (Neutral) stock has gained 5.4% in the past six months against the industry’s decline of 0.8%.



 

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