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Coke Goes High-Tech to Mix Its Sodas

By VALERIE BAUERLEIN (WSJ)

ATLANTA—Coca-Cola Co. hopes a new high-tech soda fountain will add some life to listless soft-drink sales by letting restaurant-goers mix up 104 different drinks, creating inventions such as Caffeine-Free Diet Raspberry Coke.

The soda fountain has been the touchstone of Coke's business since 1886, when a pharmacist John Pembertoncreated the secret-recipe syrup and mixed it with carbonated water. But the technology hasn't changed much since the 1950s, as a line of nozzles spit out big-name sodas.


View Full ImageDavid Walter Banks for The Wall Street Journal

An employee at a Firehouse Subs in Atlanta pours a drink with Coca-Cola's Freestyle fountain, which has a touch screen, shown at right.


Coke's new Freestyle machine is housed in a curved metal shell created by the designers of Ferrari race cars, and features a touch-screen menu. Inside, technology common in measuring tiny doses of chemotherapy drugs is used to release digitally-controlled amounts of concentrate flavor from dozens of plastic cartridges.

But the Freestyle's complicated technology and expense—Coke charges 30% more for it than traditional fountains—have slowed its way into stores. Five years after the company began developing the Freestyle, it's still only in tests in a handful of stores. Coke declined to say how much it charges for the machines or how much it has spent on the project.

The machine shows the company is bullish on sodas, even as consumers turn to tap water, teas and juices, Chief Executive Muhtar Kent said in an interview. "Everyone who touches it, everyone who drinks from it and everyone who returns to drink from it tells us they are inspired," he said. His Freestyle favorite is Coke Zero with lemon.

The soda business is in need of some innovation. Sales volume in the U.S. has slipped steadily for the past five years, and fell 2.1% in 2009 to 9.42 billion cases. Fountain sales, which make up about a quarter of soft-drink volume, slipped 2.7%, according to Beverage Digest, a trade publication.

Coke is the giant of the fountain business, with 70% of the U.S. market. A key to Coke's strategy is to sell more sodas when people are dining out, presumably with family and friends.

"If you think about ways to reinvigorate your brands and re-engage consumers, what better place is there?" said Gene M. Farrell, the vice president in charge of Freestyle.

Coke relied on a team of experts to assemble its new fountain. Dean Kamen, creator of the Segway and the insulin pump, helped adapt micro-dose technology for use with sodas;Pininfarina S.p.A., the Italian car-design firm, created a curved shell after a frumpy 2006 prototype design looked more like a mainframe computer than a modern fountain.

This isn't the first time the company has rolled out what it hoped would be a game-changing fountain. Coke introduced the Bevolution in 2007, which had separate modules for flavor shots and the ability to serve drinks super-cold. But it was essentially a traditional eight-spigot fountain, Mr. Farrell said.

Coke has filed for 34 patents on the Freestyle, but says the most important was for its so-called Perfect Pour technology, the spout that keeps one customer's Sprite with Grape from tasting like the last's Pibb Xtra.


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