Strategic Alliance Magazine Q4 2017 - 16

G I V I N G B I R T H TO I N N OVAT I O N

"It was a huge strain on their business. The challenge
was how to innovate within a system that was highly
focused on carbonated beverages and high volume to
non-carbonated and low-volume with changing consumer preferences."
After defining the problem and applying several problem-solving tools, he designed eKO Company, (the first
four letters are "Coke" backward, and KO is The Coca-Cola Company stock symbol) as a play on words to
incorporate progressive concepts such as sustainability,
innovation, and transparency. The challenge was to create new beverages in new categories that align with that
progressive vision. "We came up with the idea of a 21st
Century beverage company that was green from the
ground up with a series of beverages that are good for
you, the planet, and the community. It has a lean-andgreen supply chain that would be continuously making
the optimal "build, buy, partner" decisions creating alternative routes to market and new, positive customer
and consumer experiences. That led to what Coca-Cola
has today, which was coined in 2007 VEB-Venturing
and Emerging Brands, a very highly successful business
model," he says. "This allowed them to identify, invest,
and incubate into new categories, new brands, new
capabilities, and new channels through a 'separate but
seamless' model."
VEB's new model started with strategic investment with
a partnering strategy at the front end, and they eventually acquired Honest Tea, which opened up access to
the organic channel. Partnering with Coca-Cola gave
the entrepreneurial start-up company the fuel to grow,
he explains. "That was very pioneering to be able to incubate new products and capabilities within a company
structure that financed their venture but left them alone
to fulfill their goal regardless of the headwinds or tailwinds of the parent company. ... So they created this
new group, and they are still doing well to this day."
Core Power is another example of how VEB is innovating to get into the value-added dairy category to reach
new, active consumers. In 2012, Coca-Cola partnered
with select milk producers to form Fairlife, LLC, which
creates, markets, and sells Core Power.
Sustainability also became important to businesses in
the mid-2000s. Today, Coca-Cola is one of the leaders in the world around practices and innovation with
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STRATEGIC ALLIANCE MAGAZINE | Q4 * 2017

water. "It's all heartfelt and true. They had to figure out
how to form partnerships with the World Wildlife Fund
and other NGOs and stakeholders," Coles says.
Uber, AirBnb, artificial intelligence, "all of these nextgeneration ideas are absolutely going to create business
opportunities and a better world. But are businesses
agile enough to evolve? The only way to do it is partnering. One company cannot figure it out," he adds. "If
you grew up in the generation of the command-control
model and operate that way, it's very different than the
generation leading today. ... That's what's really changing in business, that is the biggest change in the 21st
Century?" The key, he says, is to ask the following
questions with the evolving multi-partner ecosystem:

How do we ideate to build
something new and different?

How do we create new models,
platforms, and products to deliver
greater customer experience?

How do we monetize and capture
value in a consumption- and
outcome-based world?

Table of Contents for the Digital Edition of Strategic Alliance Magazine Q4 2017