China – The Commercial Opportunity
of the 21st Century
Doug Jackson
President, China Business Unit
China Is Once Again Rising To Global
Prominence
                                                   The Future
            ...
China’s Socioeconomic Trends Offer
Tremendous Opportunity For Beverage Growth
                                            ...
We Are Just Getting Started With Enormous
  Opportunities That Lie Ahead
            •                   In China, NARTD a...
We Are Building A Large Profitable Business
                  KO Total Volume
Billion        2002 - 2008 CAGR +19%
Unit Ca...
We Are Winning…
                                            2008 Volume Growth



                                        ...
Established Clear Leadership Advantage
Against Our Nearest Global Competitor…
                    NARTD Volume            ...
A Profitable System Investing Ahead Of Demand…




 …To Create Immense Value For Our Company
                             ...
2020 Strategic Imperatives

     Expand Portfolio To Capture Value



     Invest In Our Distribution System To Win At The...
1. Expanding Portfolio To Capture Value
                     Innovation & Portfolio Expansion

Sparkling



              ...
1. Minute Maid Pulpy Super Milky
    A Winning Proposition
                A FUSION OF SENSATIONAL GOODNESS




  New Zeal...
1. Leading To SIX Billion Dollar Brands
                   Today       2020




* Defined using Retail Value
2. We Will Continue To Invest In Expanding
   Our Distribution Footprint…
  Execution
 Enhancement


                     ...
3. And Invest In Cold Drink Equipment
   To Drive Product Availability


                              6X
                ...
4. Our Partners Are Committed To Our 2020 Vision
   And Operating Seamlessly To Drive Efficiency
                         ...
4. Continue To Invest In Infrastructure
   Expansion

                                                                    ...
2020 Strategic Imperatives

     Expand Portfolio To Capture Value



     Invest In Our Distribution System To Win At The...
Ko 2020 China
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Ko 2020 China

  1. 1. China – The Commercial Opportunity of the 21st Century Doug Jackson President, China Business Unit
  2. 2. China Is Once Again Rising To Global Prominence The Future China is expected to overtake The Past Japan as the second GDP has been largest global the largest on economy in 2010 the planet for – Goldman Sachs 9 of last10 Astonishing Facts • Largest internet user base of 350 • 710 MM cell phone users MM centuries • 5.5 MM university graduates in 2008 • 300 cities with population > 1 MM Source: quote from NBC during Olympics broadcast
  3. 3. China’s Socioeconomic Trends Offer Tremendous Opportunity For Beverage Growth More Consumers Stronger Economy Further Urbanization With More Money China GDP Per Capita China Urban Growth China Middle Class Growth +$3,800 +250 MM +435 MM 70% 30% USD $ Population Population 2008 2020 2008 2020 2008 2020 Leading To Enormous NARTD* Opportunity 10 Bn unit cases 3X 30 Bn unit cases *Excluding bulk water & white milk Note: Constant 2008 price and currency neutral 2008 - 2020
  4. 4. We Are Just Getting Started With Enormous Opportunities That Lie Ahead • In China, NARTD accounts for only • Coca-Cola captures 14% of NARTD, and this 24% of All Commercial Beverages* represents only 4% of All Commercial Beverages China Personal Expenditure Rising Bubble Size: Population Mexico 620 520 China potential: 420 11 Bn unit cases Chile KO Per Capita China potential: 320 4.7 Bn unit cases South Africa Argentina 220 Brazil Philippines 120 Worldwide Per Capita = 85 Thailand 20 China -2,000 2,000 6,000 10,000 -80 PPP Personal Expenditure Per Capita ($US) *All commercial beverages = NARTD, white milk and bulk water, NA NRTD, and total alcohol
  5. 5. We Are Building A Large Profitable Business KO Total Volume Billion 2002 - 2008 CAGR +19% Unit Cases NARTD Leader 1.5 ~29% 3rd Largest KO Market 1.2 Still CAGR +35% 0.9 New Products – 0.6 ~1/4 Volume Growth ~71% Sparkling CAGR +15% 0.3 KO Global #1 0.0 2002 2003 2004 2005 2006 2007 2008 KO Global #2 25 Consecutive Quarters Of Double-Digit Growth
  6. 6. We Are Winning… 2008 Volume Growth 19% 15% 30% KO Total Sparkling Still 2008 Volume Share 14.5% 52.8% 4.9% +0.7 +0.9 +0.7 Pts Pts Pts NARTD* Sparkling Still* …With Innovation, Investment, Relentless Execution And Strong Management Team *Excluding White Milk and Bulk Water
  7. 7. Established Clear Leadership Advantage Against Our Nearest Global Competitor… NARTD Volume Sparkling 2X 1.6X KO Major Global KO Major Global Competitor Competitor Stills* Juice & Juice Drinks 8X 6X KO Major Global KO Major Global Competitor Competitor …Which Allows Us To Continue To Scale Up And Accelerate Profitability *Stills includes juice, tea, water, coffee and sports drinks
  8. 8. A Profitable System Investing Ahead Of Demand… …To Create Immense Value For Our Company 8
  9. 9. 2020 Strategic Imperatives Expand Portfolio To Capture Value Invest In Our Distribution System To Win At The Point Of Sale Invest Aggressively In Cold Drink Equipment Drive One Seamless System
  10. 10. 1. Expanding Portfolio To Capture Value Innovation & Portfolio Expansion Sparkling Juice & Juice Drinks Value-Added Dairy Minute Maid Pulpy New Categories Tea Juice Dairy Water Sparkling
  11. 11. 1. Minute Maid Pulpy Super Milky A Winning Proposition A FUSION OF SENSATIONAL GOODNESS New Zealand Minute Maid Coconut Milk Juice PULPY (Equivalent protein of 2 glasses of milk) NUTRITION NEVER TASTED SO GOOD
  12. 12. 1. Leading To SIX Billion Dollar Brands Today 2020 * Defined using Retail Value
  13. 13. 2. We Will Continue To Invest In Expanding Our Distribution Footprint… Execution Enhancement Channel …to WIN at the Picture of Success Point-of-Sale Vertical Growth 4.7 MM Sales Distribution Managed Outlets Force Partners Outlets Rural Penetration Horizontal Growth Western Expansion
  14. 14. 3. And Invest In Cold Drink Equipment To Drive Product Availability 6X Modern Trade General Trade (2/3 door) (1/2 door) CVS Convenient Store On Premise Capturing Strategic “Real Estate” In Retail Outlets
  15. 15. 4. Our Partners Are Committed To Our 2020 Vision And Operating Seamlessly To Drive Efficiency Global Innovation Center Still Customer Beverages Management National Procurement Coca-Cola Consortium University COFCO Bottling Investments Group One Seamless System
  16. 16. 4. Continue To Invest In Infrastructure Expansion Heilongjiang Jilin Xinjiang Liaoning Inner Mongolia Beijing Tianjin Hebei Ningxia 2X+ Shanxi Qinghai Shandong Gansu Shaanxi Henan Jiangsu Tibet Anhui Shanghai Sichuan Hubei Chongqing Zhejiang Hunan Jiangxi Guizhou Fujian Bottling Yunnan Guangxi Guangdong Plants Bottling plant Zhuhai China mainland only Hainan
  17. 17. 2020 Strategic Imperatives Expand Portfolio To Capture Value Invest In Our Distribution System To Win At The Point Of Sale Invest Aggressively In Cold Drink Equipment Drive One Seamless System
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