At the Super Bowl, the Coke ad was for the mini:
Where are we going? To our big response to small packages.
Coke Mini Sales
When Coke sells us a mini-can 8-pack, we pay 5 cents an ounce whereas the price per ounce is 3 1/2 cents for the 12-ounce cans in a 6-pack. Requiring less spending on aluminum or glass and charging more per ounce, the smaller package is a good deal for Coke. As Coke confirms, the mini is making them more money while larger can purchases are shrinking.
Why Portion Labels Matter
In a study from the Cornell Food and Brand Lab, the same amount of food was labeled differently. Using a 16-ounce and 8-ounce portion of spaghetti, researchers first called the larger portion regular and then labeled it double-size. Correspondingly, the smaller plate started as half-size and then became regular. The results? People ate much more of the larger portion when it was labeled regular because they thought that a regular label signaled the norm.
I suspect the Cornell experiment relates to soda because a new consumption norm has evolved. In 1998 the typical American consumed 576 cans of soda, By 2013 that number had gone down to 450. With healthy eating habits going mainstream, we are adhering to the new norm by trying to drink less sugary soda. Because the Coke mini has fewer calories, we are buying many more of them. As with the spaghetti experiment, we are consuming what has become the norm.
Our Bottom Line: Oligopoly
Market share for carbonated soft drink companies:
Thinking of the four basic competitive market structures–perfect competition, monopolistic competition, oligopoly and monopoly–packaging counts when firms need to distinguish their products. And that returns us to the Coke mini. As an oligopoly, Coke uses its small packaging for product differentiation. Interestingly, that differentiation relates to their own larger sized drinks and to other soda sellers.