Dive Brief:

• Coca-Cola's drink volume grew 3% in Q1 2018, including double-digit growth in Coke Zero and a positive performance from Diet Coke, which returned to volume growth in North America, according to the company's earnings report for the quarter. 
• Diet Coke's strong performance follows a new campaign and brand overhaul that helped deliver the first growth for the product since 2010 despite a disappointing Super Bowl ad, according to Ad Age. The ad was ranked last in USA Today's Ad Meter.
• In its earnings call, Coca-Cola reported that its digital marketing strategies, including the use of augmented reality and smartphone scanning, as well as its sleek, modern packaging, are helping the company bolster its reputation among younger consumers.

Dive Insight:

Coca-Cola's efforts to freshen up its Diet Coke brand seem to be paying off, as the Q1 2018 earnings report shows. Announced in January, the brand revamp included updated packaging with taller, slimmer cans and new flavors aimed at appealing to the next generation of consumers: the highly coveted millennials and Gen Zers who often favor less-sugary alternatives to soda. The soft drink brand pushed Diet Coke’s refresh heavily on social media, including with a video titled "Millennials Try the New Diet Coke Flavors for the First Time." In its earnings call, Coca-Cola CEO James Quincey said the company is "encouraged" by Diet Coke's performance but recognizes it's too early in the brand overhaul to tell if the growth will continue.

Coca-Cola also reported that its digital marketing strategies and more modish packaging are helping the company bolster its reputation among younger consumers. Quincey noted two examples from China demonstrating how the brand is strengthening its digital marketing efforts. For Chinese New Year, Coca-Cola partnered with Alipay to connect the brand to the holiday's cultural rituals using AR. Also in China, Coca-Cola used sleek cans with localized labels that consumers could scan. Both initiatives helped generate 1 billion consumer impressions and helped volume of Brand Coca-Cola in China grow more than 20% in Q1.

Overall, Coca-Cola revenue fell 16% to $7.6 billion in Q1. The company saw a profit of $1.37 billion for the quarter compared to $1.2 billion last year, according to The Wall Street Journal. 

As part of its digital strategy, Coca-Cola may also be eyeing e-commerce. Previous reports point to how the beverage brand is looking into consumers' purchasing habits and working to maintain a strong presence wherever people choose to shop. While e-commerce makes up only a small part of grocery sales today, it's expected to comprise 20% of all grocery sales by 2025, representing $100 billion, according to Nielsen and Food Marketing Institute data reported in Food Dive.