Coke Tests RFID Drink Dispenser That Gathers Business Intelligence

Between the time when a typical quick service restaurant sells a customer a drink and that customer goes to a self-serve drink station and gets their drink, it's typical for consumers to change their minds. The restaurant doesn't care as it typically sells all drinks for the same price.

But Coca-Cola certainly cares and it's opted to try and do something about it, crafting a machine that offers more than 100 varieties of sodas, juices, teas, and flavored waters and reports to the mothership with every selection.

The move has huge potential mostly because, from the consumer's perspective, it's so non-interruptive. Consumers are already in the habit of using self-service beverage machines at fast-food facilities, so it should encounter almost no resistance. All that will be visibly different is a much greater amount of beverage choice. As long as the machine's interface is clean, that shouldn't be a problem. But if the options look—even at a glance—overly complicated or time-consuming, things could turn ugly quickly.

"Coke plans to roll out the Freestyle drink dispenser nationwide, eventually putting tens of thousands of them in places such as McDonald's, Burger King, and Willie's Mexican Grill. Freestyle will let Coke more easily test new drink flavors and new beverage concepts, such as adding various vitamin combinations to flavored waters and juices. The dispensers each contain 30 cartridges of flavorings that mix up 100 different drink combinations," according to this nicely-done InformationWeek story.

"The cartridges are tagged with radio frequency ID chips, and each dispenser contains an RFID reader. The dispensers collect data on what customers are drinking and how much, and transmit that information each night over a private Verizon wireless network to Coke's SAP data warehouse system in Atlanta. The company will use the data to develop reports that assess how new drinks are doing in the market, identify differences in regional tastes, and help fast-food outlets decide which drinks to serve."

The "marketing will be a lot cheaper than the model Coke's been using: bottling and bringing to market new products that sometimes don't gain traction and get canceled after a year or two," IWEEK reported. "Coke also will use the wireless network to send out new drink formulas to the beverage machines with instructions on how to mix them up. And should the soda company ever need to recall a flavor cartridge, the network also lets it instantly disable dispensers across the nation."

The soft drink leader is also hoping to spot some regional and time-based trends. "If the company determines that a certain flavor is gaining traction in a specific region--say, Peach Coke in the South--it will know that's more than a short-lived trend and could opt to bottle that flavor through retail outlets in that region with reasonable assurance that the investment will pay off. One test outlet is already getting interesting results from the system, finding that sales of Caffeine-Free Diet Coke spike during the late afternoon. Customers apparently try to avoid sugar and caffeine late in the day, Dennis says, and the outlet could use the LCD panel on its Freestyle machines."