Coke & Weight Watchers: Profits Sink as People Adapt

Coke and Weight Watchers are two iconic brands with profits sinking while the order of things changes around them. Warren Buffet, known as the Oracle of Omaha, warns that complacency is the greatest danger to a successful company. In Coke and Weight Watchers, we have two very different icons struggling stay relevant as people adapt to the same problem — obesity.

Coke announced profits that fell short of expectations this week, driven in part by declining sales of of soda in the U.S. because of increasing health concerns about sugary beverages. Consumers have come to so mistrust Coke that they even question the health effects of no-calorie sweeteners. Let’s be clear. Objective facts support a conclusion that no-calorie sweeteners are a healthier alternative to sugar in beverages. But consumer mistrust of “Big Soda” trumps the facts.

Coke must adapt and earn consumer trust or complacency will sink another successful company.

Weight Watchers has defined the order of things for fifty years in the world of weight management. It was a social network for women concerned about their weight long before the concept of social networking became the basis for hot new technologies. Their network was defined by physical locations and a disciplined approach to personal accountability for watching your weight. It’s where Betty Draper in the 60s Mad Men era went first to get her weight under control.

But as Weight Watchers struggles to innovate in a rapidly changing environment, its profits are falling short of expectations and its stock price is slipping. Fitbits, smartphone apps, and a range of emerging technologies are redefining the marketplace and consumer expectations. More subtly, consumers are adapting as they recognize obesity as a medical issue that involves more than just personal discipline. Face-to-face meetings at Weight Watchers are relevant to a shrinking core group of women.

“Adapt or perish, now as ever, is nature’s inexorable imperative” — H.G. Wells.

Click  here, here, and here to read more about Coca Cola’s situation. Click here and here to read more about Weight Watchers.

Old Sink, photograph © House of Bamboo / flickr

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