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Data streams deliver new revenue to Coke

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The internet of things is new territory for many companies, but one brand that millions of people interact with each day has been relying on the IoT for years. Coca-Cola started connecting vending machines to computers long before its customers ever heard of the internet. The goal was to monitor the temperature of the drinks, but over time new use cases evolved. Now the beverage giant uses data collected from its Coca-Cola Freestyle vending machines to learn what flavors people choose to combine most often. Coke recently launched Cherry Sprite based on data gleaned from its connected vending machines.

Analyst Sam Lucero of IHS Markit said Coke’s use of IoT data to create a new product demonstrates the value in connected equipment, but the beverage giant’s system is not necessarily scalable. Lucero said most IoT deployments rely on proprietary networks and data than cannot be leveraged for multiple uses.

“Right now we are siloed intranets of things,” said Lucero. “This is like going from BlackBerry to iPhone. Right now we’re still at a Blackberry phase and we’re trying to move to a much more open phase of dealing with data.”

Lucero, a featured speaker at this week’s IoT6 Exchange Conference in Austin, said IoT platform providers and system integrators are working to simplify both development and deployment. He said some vendors are delivering IoT hardware and software based on open source code to increase flexibility and help companies scale when they’re ready.

For Coke, the time to scale is now. The company’s IoT success is not limited to product launches – it’s also using sensors and wireless networks for supply chain management. The same Freestyle vending machines that monitor data about flavor choices can also notify the company’s distributors when a certain flavor is running low, triggering a restock before the flavor runs out.

Unlike Coke’s data on drink flavors, its supply chain system could be highly scalable. As a partner of distributors and retailers around the world, Coke could have an opportunity to share its system and create an ecosystem. The recipe for Coca-Cola may be top secret, but the company’s recipes for connected logistics could unlock new value in its industry.

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