Coca-Cola moves forward with fountain of the future

 
Aug. 4, 2009 | by Christa Hoyland
*Click here to view a slideshow of the Coca-Cola Freestyle dispenser.  
The Coca-Cola Co. is poised to reinvent the fountain beverage business with its new Freestyle self-service drink dispenser. The dispenser, now in a test phase in three markets, allows consumers to choose from more than 100 branded drinks — without taking up any more space.
 
Gene Farrell, vice president, special projects, Coca-Cola North America, said the Freestyle dispenser has the same or smaller footprint as the typical Legacy six- to eight-valve dispenser. Freestyle's goal is to offer consumers more variety as well as a user-friendly experience.
 
"So far we believe we've been successful there," Farrell said. "It's a fast learning curve, and it's not intimidating for customers."
 
How it works
 
The Freestyle dispenser brings together several technologies, including some borrowed from the medical industry, to create the experience.
 
From a consumer standpoint, customers use a touchscreen to select their desired Coke product, from flavored waters and teas to the company's most popular carbonated beverages.
 
The process starts with the consumer choosing their desired beverage and then moving on to subcategories within that type. For example, consumers choosing a Coca-Cola Classic bottle cap on the touchscreen will then see the next screen offering varieties such as Cherry Coke or even Coke with Orange — all brands sold throughout the world.
 
The unit features an inline ice and beverage dispenser, allowing customers to press their cup against the ice lever for the desired amount. Customers also can control the amount of beverage dispensed as well.
 
Ease of maintenance
 
For operators, the new dispenser offers a number of benefits, starting with the unit's maintenance. Whereas traditional dispensers require a five-gallon bag-in-the-box for each flavor, the Freestyle uses high concentrate ingredients, borrowing the concept of microdosing from the medical field, Farrell said.
 
"It allows for very precise control of quantities of liquid (using) high concentrate components," he said. "All of the brand beverage components on are the machine. The only thing in the back room is the nutritive sweetener, in this case HFCS (high fructose corn syrup), which uses 40 percent less space than the current six- to eight-valve fountain."
 
Each brand's concentrated oil is stored in a cassete, identified by an RFID tag. Operators open the lower cabinet on the unit, identify the empty cassette — the largest of which is 46 ounces — and replaces it.
 
"It's as simple as changing out a printer cartridge," Farrell said.
 
Development process
 
Coca-Cola developed the Freestyle based on extensive consumer research, which revealed that customers want more variety than traditionally thought.
 
"Conventional wisdom was if you were offering them 20 or even 30 brands at a convenient store, boy, you've really tapped out the variety plan," Farrell said.
 
But consumers wanted even more variety and they didn't simply want flavor shots. Coca-Cola's Bevariety dispenser, for example, offers 50 different drink options, including custom-made beverages.
 
Farrell said consumers had various reasons for not liking the flavor shots, including the flavors adding calories to diet drinks as well as the resulting drinks' unreliable quality.
 
"They wanted to know that whatever brand they selected that we had tested it, and it was going to taste good or certainly it was going to taste the way it was supposed to," he said.
 
That doesn't mean consumers shy away from mixing flavors. The Freestyle unit still allows customers to mix brands, and operators have observed customers mixing Cherry Coke and Vanilla Coke to create a cherry vanilla drink, for example.
 
Future options
 
Coca-Cola is using this test phase, the first to use manufactured dispensers, to identify and resolve any problems with the user interface, dispenser or user experience. Units are being tested in Atlanta, Southern California and Salt Lake City, and the California and Utah tests will continue through the summer.
 
Quick-service restaurants involved in the test include Jack in the Box, Subway and Carl's Jr.
Farrell said Coca-Cola will use data from this phase to determine the dispenser's expansion and rollout. The company plans to expand testing to Dallas and Chicago by the end of the year and is still determining additional markets for 2010.
Offering the Freestyle will likely cost operators slightly more, Farrell said, but early results show an increase in incremental transactions. In the Atlanta market, both operators testing the unit are "seeing double digit increases in total beverage transactions, which more than offset what we anticipate will be slightly higher costs."
 
For example, diet caffeine-free beverages typically aren't offered in QSRs because of the limited number of available valves despite demand in the afternoon and evening dayparts. In the Freestyle test, one operator has found that diet caffeine-free drinks have become the No. 1 seller in those dayparts — sales that typically may have been lost to those consumers opting for water, he said.
 
The Freestyle also shows promise in the drive-thru. One test location has reported that customers are ordering drinks in the drive-thru that they poured for themselves in the store on earlier occasions. The store is not set up to offer Freestyle drinks through the drive-thru, so customers have opted to pull out of line to order and get their drink inside, Farrell said.
 
The company is developing a dispenser for the drive-thru, which should be available for test by mid-2010.
 
Overall, Coca-Cola sees a lot of promise in the new dispenser.
 
"We're very encouraged by our progress so far, and we think this innovation has significant value for our customers," Farrell said.

Topics: Operations Management


Christa Hoyland / Christa is editor of QSRweb.com and contributes to FastCasual.com and PizzaMarketplace.com. She has experience in the restaurant industry as well as 15 years as a journalist.
www View Christa Hoyland's profile on LinkedIn

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