Partnership is in the DNA of Coca-Cola. Our history has turned on pivotal partnerships that grew the business exponentially. Bottlers provided scale, customers delivered reach, rights holders brought new meaning to our brands.

According to Emmanuel Seuge, vice president of global alliances and ventures, Coke's highest-impact partnerships involve a balance of two very different forces: love and collision. When both are active in a partnership, “we do big things that we wouldn’t have thought of otherwise,” he says.

Earlier this year, Seuge explained the “love and collision” dynamic as keynote speaker at the 2014 IEG Conference in Chicago. Here, he talks about the importance of venture partnerships with high-energy startups.

Q: 'Love and collision' is an intriguing way to describe our partnerships. Why does it fit? 

ES: For Coca-Cola, a partnership is here to address and help us with a business problem. Partnership is the belief that sometimes by joining forces with others we might be more successful and efficient than alone. Sometimes this means making a break with how things have been done, through innovation. This is where the concept of collision comes in. Provoking healthy collisions by bringing around the table different types of expertise, different ways to operate, different points of view and styles of action. From these collisions come innovative ideas that help us engage consumers in new ways and continue growing the business. 

Collisions can also generate friction, so a partnership needs love to balance the friction and channel the energy. By love, I mean trusting each other, understanding each other’s goal and objective, caring about each other’s success, sharing in the positive outcome. Partners must understand each other’s needs and genuinely believe that we are stronger together than if each was alone. 

We are not inventing something new with these partnerships, just using the concept of Love and Collision as a way to approach them. When you spend time in the Coca-Cola archives you realize how much partnerships have been at the core of our growth. Asa Candler sold the rights to bottle Coca-Cola to our first bottling partner for $1. The partnership of the century! Each partner relied on the expertise of the other. We relied on their production and distribution capability and they relied on our ability to build and market brands. There is no better case study to show that partnerships have been fundamental to the evolution of our business.

At IEG, you talked about bringing different types of partners together to create these collisions. How does that process work?

ES: We look at partnerships through three lenses. The first lens is our global partnerships, which are with big sports organizations such as the IOC and FIFA. We define those as our Global and Scalable partnership. They are massive by design but also because of the investment we put behind them are absolutely required to drive results for our business. So failure is not an option here.

The second lens is our partnership with the Entertainment industry, which includes Gaming, Music and Films. We call those “value for value partnerships.” The entertainment industry is innovative and willing to explore different business model to drive value to each partners. 

And the third area, which is fairly new, is all the partnership we build with start up. We define those as marketing venture partnerships. In those cases, while still trying to use them to answer a business need, we innovate much more, we take more risk. Most of the time we also take an equity stake with those partners as a way to potentially reward our risk taking as a company. 

When you think of these three types, they are complementary. Global and scalable partnerships, as well as value for value partnerships, involve large investments and give us a lot of reach. At the other end of the spectrum, venture partnerships are smaller in size and reach, and we are more willing to take risks and less worried about failing. If you are able to create collision and seek to bring more reach and scale to a venture partnership, and more speed and nimbleness to a global partnership, then this is where you can create disruptive growth.

Here’s an example. Last year we organized a venture summit and got all 5 starts ups we have a partnership together to brainstorm together with us on the invention of new ideas, new eco-systems, new platforms that we could build together and that would expand the meaning of what each product – alone – stands for.

This is how the app “Happy Move” was created, an app that tracks your movements through two startups in which we have a stake (MISFIT and Endomondo) and rewards you in free music through Spotify (another partner of ours.) That idea is the result of those three startups and Coke coming together and accepting to do things differently. That’s what collision is all about

When you provoke a collision of a global partner with a venture partner, how do you nurture the creative process since they come from such different horizons?

ES: The ambition to leverage different forms of expertise in non-traditional ways forces us to be flexible. When we work directly with an artist, or with a start-up, it’s an invitation for us to think differently. So, for example, we bring an artist like the DJ Avicii or David Guetta into the partnership of our brand Burn® with Lotus Formula 1 racing. Or we bring a composer like Marc Ronson into our IOC partnership. There is a lot of energy. One fuels the other. To reach a great creative outcome, we need to recognize that it’s a very different process than working with traditional creative partners. And this is where the love comes in. There must be patience, caring and trust in any partnership relationship. Otherwise there could be unhealthy frustration. Think about one of our largest partnerships of today, FIFA World Cup. There was a time when this relationship was young and small. We took the time to understand each other’s needs and aspirations. We went out of our way to help each other. This is how the partnership still works today on a much larger scale. And on both sides, the business benefits keep growing as a result.

How do you find startups and innovators that will be a good fit with Coca-Cola?

ES: The starting point is remembering that we don’t do partnerships for the sake of partnerships. The business need is the starting point and partnership can be a way to solve it

Here is an example. Two years ago, we were looking for a partner in the activity-tracking device space, as part of our commitment to inspire and help our consumer to live an active lifestyle. We went on a quest to Silicon Valley and met maybe 12 start-ups that were potential partners. We met all the big players in that field but also some smaller companies. When choosing a partner we apply the 3 P selection process:

  1. People – Are the people at that start up people we want to work with, we trust and believe in. Are they people that share the same value that we do at the Coca-Cola Company. DO they love and drink our brands? And would defend them the same way we do?

  2. Product – Is the product they are creating unique and better for the needs that we have? Does the product have viability in the mid-term. Does it feel like a product that would work well with our brands’ positioning

  3. Promise – What is their long term vision for the company. What is their company mission? Why do they exist and does the answer to those 3 questions answers that work well with our Company mission and our Vision 2020 agenda.
On that particular quest in the Valley we ended up partnering with a 5 people start up called MISFIT who manufacture the activity tracking device SHINE. The people of Misfit cared about the same values as we did. They were fans of our brand and believed in the value of being partners with us. We had genuine understanding of each other’s goals and believed we would be stronger together. As for the product, it was solid and answered our business need. We could see that it had a strong future. And the promise – they had a long-term vision that fit with our own. So all the elements were in place.

4 months after meeting them for the first time and only three weeks after signing the contract, the Coca-Cola red Shines were sold in all Apple stores worldwide. That is the beauty of working with a start-up. They have different definition of what speed means!!! Such is the nimbleness that a venture partner can bring.

What’s the most “out there” partnership you might consider?

ES: We are constantly looking for new ideas that can answer a business need. The concept of venture partnerships is not limited to start-ups. It’s more of an invitation to think broadly and boldly. Back in 1928, how would we have negotiated differently with IOC if we had thought of the relationship as a venture partnership?
 An example today of going into new territory is the Coke Zero partnership with the emerging professional video gaming business. This is a fast-growing phenomenon of eSports, where thousands of people gather together in large venue to cheer and watch professional gamers compete one another. It’s a pretty fascinating world that gathers millions of people on-line as well. We started last year a partnership with Riot Games, founder of the game phenomenon “League of Legends” and we are learning a lot from that partnership in terms of how to connect deeply with a very targeted group of teens.

What are the “watch outs” in a partnership of love and collision?

ES: There are two. The first is not to be carried away by shiny objects and forget the business need. Stay grounded in the core thing. Also, in the venture partner space the chance of failure is higher than in other spaces. This is fine as long as we are learning for the next opportunity.