Coca-Cola CEO James Quincey has said the company is positioned for “disciplined growth” thanks to a newly refranchised bottling system and an expanding portfolio of consumer-centric beverages.
In 2017, the company achieved or exceeded its projections for revenue and profit during a year of transition and is poised to deliver even stronger results this year, Quincey said, citing the divestiture of company-owned bottling businesses and a refined focus on revenue growth management via smaller packaging and premium brands.
Last year, Coke’s sparkling soft drinks unit saw volumes decrease by 1%, while juice, dairy and plant-based beverage volumes were flat. However, water segment volumes rose 1%, while tea and coffee increased by 2%.
In November, it completed the refranchising of its bottling operations in the US, representing 60 transitions, the company’s largest ever refranchising initiative.
Quincey said: “We’re at an inflection point, because the underlying and enduring strength of the business is now going to become more visible in the numbers and to our shareholders.
“We’re very clear that we have to start with the consumer and drive our portfolio of brands to be ever more consumer centric.
He added: “Consumers are changing the way they shop, in very fundamental ways. The digitisation of the whole experience is ongoing… and we need to participate in a very different way. Said in the simplest terms, it’s about finding a way to reconstruct in the virtual world those imperatives that have existed for so long in the physical world, at which the Coke system has been very effective executing against.”
A focus on smaller packages is driving the company’s journey to become “more value orientated than volume orientated” through a focus on growing transactions, Quincey said.
“This fits very nicely with our approach on helping people consume the right amount of sugar. There’s an intersection of many of the challenges we face and many of the opportunities we can take advantage of if we focus on smaller packages.”
Coke is also accelerating its investment in premium brands, like Topo Chico (in the US) and ViO Schorle (in Germany) sparkling mineral waters, and the Schweppes 1783 line of mixers in the UK.
The company is also scaling successful brands from market to market, including the Adez line of soy-based beverages, which is expanding from Latin America to Europe. “We’re adapting the formulas, the tastes and the benefits of the drinks, to each continent’s local realities,” Quincey said.
“I think what you see now is a much greater sense that we can move products around the world,” he continued. “The strength of the company over time will be the ability to source ideas from any part of the world and have them travel.”
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