New Zealand: Karma Cola Building Distribution

The co-founder of the ethical cola company signed up by Jamie Oliver’s restaurant group says the deal shows the business is a real “contender” in the lucrative British beverage industry.

Karma Cola’s Simon Coley said the decision was a year in the making and came after the group did extensive trialling in one of its restaurants.

“They gave a card with every purchase of Karma Cola with a little note saying should we keep stocking this,” Mr Coley said. “All 150 came back saying yes, so they couldn’t really not do it after that.”

Simon Coley and two business partners set up Karma Cola in a shed in the central Auckland suburb of Grey Lynn in 2012 with the intention of creating a range of fizzy drinks that would be organic, sustainable and help those that provided the raw ingredients. The idea caught on and last month the company sold its 100 millionth bottle.

“The world consumes 1.8 billion cola branded drinks every day so it’s an extraordinarily large category in the beverage industry,” Mr Coley said. “We wanted to do some good and thought this was an industry where that was a possibility.”

The company has stuck with its original ethos despite the added costs involved in sustaining an ethical, fair-trade business model.

“There is a commercial tension. We’re trying to manage our margins to keep the price attractive for consumers and at the same time protect the producers who ultimately benefit from the sales of these drinks,” Mr Coley said.

“I don’t think we’d have the success we’re experiencing if we didn’t do what we believe in and wear our heart on our sleeve.”

Mr Coley said the company had no plans to change its business model despite a doubling of sales in each of the past two years.

“We’re seeing more brands and chains of these fast casual dining restaurants like Jamie’s Italian in the UK wanting to differentiate themselves by choosing products like ours that have similar values,” he said.

Along with Jamie Oliver’s restaurant group, Mr Coley said Karma Cola had recently done deals to sell its drinks in the Wahaca Mexican restaurant chain and Honest Burger chain in the UK.

“There’s a whole group of these sorts of fast casual dining restaurants that are trying to do the same thing – give a great experience and care for all the ingredients and the people responsible for producing them,” Mr Coley said.

When it comes to the health-side of the carbonated drinks industry Mr Coley said they were making progress there too.

The company has just developed a sugar-free version of its products which will be launched in Jamie’s Italian and has also designed a 250ml can for its products to create a smaller portion size.

“We’re focused on making this work in other parts of the world now,” Mr Coley said.

“The story is catching on and because we’re trying to make something that benefits all of the people in the supply chain, there’s a real fascination and interest for giving us a hand.”

Ecovia Intelligence Comment
Karma Cola is taking off because it is providing a sustainable cola drink to discerning consumers. Gone are the days when consumers only considered price and taste when buying soft drinks. The rise in ethical consumerism  is creating a market for such products. Natural & organic food retailers were the early adopters, followed by mainstream retailers; now it is the turn of the catering & foodservice sector.

Developments in sustainable foods and beverages are regularly featured at the Sustainable Foods Summit. The Latin American edition of this executive summit will be hosted in São Paulo on 18-20th September, whilst the Asia-Pacific edition will take place in Singapore on 28-30th November.

Source: Otago Daily Times / Ecovia Intelligence (09/08)