Coca-Cola Wades Into Milk Business With 'Fairlife'

Transcript

ARI SHAPIRO, HOST:

Big soda companies have already gotten into the water business and the juice business. Now Coca-Cola is expanding into the milk business. It's rolling out a product called FairLife. Its milk, but with more protein, more calcium and less sugar and it costs more. First we asked NPR's Allison Aubrey to help us understand why Coke would decide to sell milk.

ALLISON AUBREY, BYLINE: So I think the frame is this - big soda has a big problem, right? Soda sales are flat if not decreasing.

SHAPIRO: So to speak, soda's flat.

AUBREY: That's right. Diet soda sales, down. Many consumers don't like the idea of artificial sweeteners and of course, we all know that we're supposed to be consuming less sugar. So what do these huge multinational companies try to do? They try to switch up their model entirely. The other thing here, Dasani - a big moneymaker for Coca-Cola.

SHAPIRO: That's their water brand.

AUBREY: That's their water brand, but the growth of the water - of the bottled water market - is starting to flatten out to, too so they are desperately looking for a new product line.

SHAPIRO: Well, Coke is already trying this new product. They call it FairLife. It's on sale in Minnesota so we called a store to see how it's selling there.

STEVEN THUERINGER: Frozen dairy department. Steven.

SHAPIRO: Hi, Steven. This is Ari Shapiro calling from NPR in Washington.

THUERINGER: Hello, how are you?

SHAPIRO: I'm good, how are you?

THUERINGER: Pretty good.

SHAPIRO: So Steven Thueringer from Coborn's in Belle Plaine, Minnesota, how is Coca-Cola's new milk product selling over there?

THUERINGER: (Laughter) It's going pretty awesome, actually.

SHAPIRO: Really?

THUERINGER: Yes.

SHAPIRO: Let me ask why because apparently it costs something like 50 percent more than regular milk?

THUERINGER: Yeah just about that. It's fortified milk so it's supposed to be better for you. It has extra calcium and extra protein in it.

SHAPIRO: You know a lot about this.

THUERINGER: I do.

SHAPIRO: Why?

THUERINGER: Because it's a health kick. Everybody's on a health kick these days.

SHAPIRO: (Laughter) So what's the typical customer like?

THUERINGER: Typical customers that buys it is usually younger.

SHAPIRO: Really?

THUERINGER: Yup you don't get too many of the older generation to buy it. It's mostly - I don't know, people in their 20s to 40s?

SHAPIRO: What does it taste like?

THUERINGER: It tastes almost like normal milk, really.

SHAPIRO: Almost, but not quite?

THUERINGER: Yeah, not quite. It's got a little bit different of a taste. It's not quite as, you know, thick or whatever you want to say, though.

SHAPIRO: Has it replaced the real thing in your cereal?

THUERINGER: (Laughter) No.

SHAPIRO: (Laughter) An executive from Coca-Cola said they think this is going to rain money. Do you think they're right?

THUERINGER: I think it's going to do very well, yes. They actually have a hard time keeping it on our shelf.

SHAPIRO: Really?

THUERINGER: Yes.

SHAPIRO: And how long has it been for sale in your shop?

THUERINGER: It's been on sale about six to seven months, somewhere in that. About a half year - a little over a half of a year.

SHAPIRO: And does everybody immediately know what it is, or are they like, what's this weird product next to the milk on the shelf?

THUERINGER: No, they don't. Yeah, they pretty much have to pick it up and look at it.

SHAPIRO: Can you tell it's a Coke product?

THUERINGER: No, you cannot. (Laughter) You would never tell it was from Coke if you wanted to.

SHAPIRO: We've heard that one reason Coke might be interested in this is that soda sales are dropping fast. Is that something you've seen?

THUERINGER: Yes. Soda sales are on the decrease and once again, I think that's because of the health kick that's happening and going on.

SHAPIRO: Is the choice people are making just between normal milk and FairLife, this Coke product, or are there other options in the mix?

THUERINGER: There are some other options in the mix, too. It's not just those. Milk with hormones in it, milk without hormones in it, and then you've got your FairLife milk and then your flavored milk and then, now you have your organic milks that are now becoming pretty big.

SHAPIRO: Does it come in like, skim, 2 percent and whole varieties?

THUERINGER: It comes in skim, 2 percent and chocolate.

SHAPIRO: Oh, chocolate, wow. (Laughter).

THUERINGER: (Laughter).

SHAPIRO: Well, listen, I know the day before Thanksgiving is pretty much the busiest day of the year in the grocery store life so...

THUERINGER: It is.

SHAPIRO: ...We're going to let you go, but thanks for your time.

THUERINGER: All right. Absolutely, thank you very much.

AUDIE CORNISH, HOST:

That was Steven Thueringer, dairy manager Coborn's grocery store in Belle Plaine, Minnesota. He was talking about Coca-Cola's new line of fortified milk called FairLife. Transcript provided by NPR, Copyright NPR.