COCA COLA THAT'S GOOD FOR YOUR SKIN?

Coke And L’Oreal Partner On New Health Beverage

March 12, 2007

By Kenneth Hein

NEW YORK — Coca-Cola and L’Oréal are partnering to create a new health-and-beauty beverage to launch in 2008, sources said.

Currently called Lumaé, the nutraceutical drink was trademarked as a tea-based ready-to-drink beverage by Coca-Cola’s Beverage Partners Worldwide division. The drink, which is still in the early stages of development, is expected to contain ingredients that will help women care for their skin, per a source.

L’Oréal is a leader in skincare, boasting such brands as Skinceuticals, Dermablend, La Rocher-Posay and Vichy thermal spa water.

Lumaé is expected to target active, influential, image-conscious women over the age of 25 who embrace health and wellness. Coke is interested in marketing and distributing Lumaé like a beauty brand instead of a soft drink. Early plans call for distribution in Saks Fifth Avenue (instead of Coke’s usual venues, like 7-Eleven). This could ruffle bottlers’ feathers, said a source, considering beauty salons and the like aren’t the typical stops on a distributor’s route. Product testing is expected to begin shortly.

Coke rep Ray Crockett said, “At any given time we have numerous products and flavors in development. For obvious reasons we don’t comment on these.”

BPW is a joint venture between Nestlé and Coke. Nestlé is a major L’Oréal shareholder owning roughly a quarter of its stock.

A similar product, Borba Skin Balance waters, has already cemented itself in Sephora stores. Launched in 2005, the portfolio of drinkable skincare products claims to help various conditions. “We pioneered the category,” said company president Scott Vincent Borba. “Even if they come in at a lower price point, they’ll never meet the clinical criteria that we have nor will they beat the emotional branding we have with our consumers.”

Such nutraceutical products are already popular overseas. In Japan, for example, Coke has launched several entries including Love Body, which it claims not only burns calories, but contains an ingredient rumored to increase bust size.

Products like Lumaé were placed on the front burner by Coke’s former head of marketing, strategy and innovation, Mary Minnick, who resigned last month. Anomaly, New York, is Lumaé’s agency, a source said, but the firm did not return calls.

Coke launched Enviga under its BPW division nationally last month. Coke asserts that sparkling green tea burns calories, but the Center for Science in the Public Interest filed suit challenging the claims. Connecticut attorney general Richard Blumenthal opened an investigation into the product last month as well.

Atlanta-based Coke is debuting Diet Coke Plus, which contains vitamins and minerals, later this year. Last week, it announced Minute Maid Active, which contains glucosamine HCI, to help support healthy joints and Minute Maid Multi-Vitamin. They join Minute Maid Heartwise, which reduces cholesterol.

“Pretty soon there will be a drink for every part of the body and every mood you’re in,” said Larry Trachtenbroit, head of Brain-Twist, New York. The former Coke employee has created a ready-to-drink version of the alleged immune system-boosting Airborne, among other enhanced products. He said the flurry of new functional beverages is a result of improved technology.

Tea appears to be the right category to enter. Although carbonated soft drink volume was down 0.6% last year, per Beverage Digest, Bedford Hills, New York, ready-to-drink teas were up 25.8%. Coke is a distant third in the category with Nestea and Gold Peak generating a 10.1% share. Coca-Cola Enterprises has signed a distribution deal with No. 2 AriZona, which owns a third of the category behind PepsiCo’s 37.2 share, commanded by its Lipton and SoBe teas.

Borba welcomed the competition: “It will really help raise our awareness.”