2. Coca-Cola Overview
2020 Goals
- To Double the Coca-Cola system’s revenues (2010 revenue 35 billion)
- Be #1 in NARTD business in every market and category
- Be the most preferred and trusted beverage partner
- Global leadership in sustainable water use
- Manage people, time and money for greatest effectiveness
The world largest soft drink company
The most powerful brand in the world - $70 billion in 2010
3. Coca-Cola History
1886 John Pemberton invented Coca-Cola : Atlanta, Georgia
1895 Asa Candler aggressively marketed Coca-Cola available in
every state
1916 Erenst Woodruff took Coke to public – “Arm’s width of
desire”, “It’s the real thing” – International phenomenon
1981 Robert Goizueta debuted Diet Coke expense marketing
$ 100 M. in the first year
1983 Diet Coke had become The best–selling diet soft drink
1997 Douglas Ivester Asian financial crisis
2000 Douglas Daft cut cost laid off 6,000 employees, Legal
problem, brand image & invest mistake (Quaker Oats)
2004 E. Neville Isdell bring back several senior manager – create
“Manifesto for growth”, Strengthen brand power
2005 Muhtar Kent spearhead the company’s international
business – Global sales increase 6%
5. 2. BOTTLERS
- Manufacture, operate
- Selling and delivery drinks
- Direct store delivery (DSD)
- Concentrate price was fixed
- Can carry competitor’s non-cola brands
- Final say in retail pricing decision
3. RETAILERS
- Supermarket
- Restaurants, Cafeterias
- Convenience stores
1. Concentrate Producer
- Blended raw material ingredient
- Ship to bottlers
- Invest in R&D innovation
- Invest in Marketing - Advertising
4. SUPPLIERS
- Caramel coloring
- Phosphoric / Citric acid
- Caffeine
- Can manufacturer – Ball and Rexam
8% margin 32% margin
6. Sales rose and grew to 75% of Coke’s North American
bottle and can volume
Coke bought CCE’s entire North American operations
Revenue ratio change from quarter to half of its sales
- Significant acquisition in 1985 by
Goizueta – buy 2 Coke’s biggest
bottler – control 1/3 of Coke’s
volume
- Coca Cola Enterprises (CCE) was
spun off the Coca Cola company
in 1986
- CCE become Coke’s first
domestic “Anchor bottler” ;
consolidate bottler through CCE
- Coke buy small bottlers and sell
to CCE
The creation of CCE
CCE in 2010
CCE got financial strapped to invest more
7. The Emergence of Still Beverage
Consumer’s trend - Healthier Lifestyles
Coke response
- Low / no-calorie drinks : Coke Zero (2005)
- New digital media platforms
- Global campaigns at sports events like the World Cup
Still beverages : Sport drinks, enhanced water, ready-to-
drink teas and coffees, energy drinks, juice, and juice drinks
Opportunities : Market growth and Higher retails price
Impacts on Coke : Hot-filled plant – innovation and higher
margin, Bottlers lose profit
- New challenges – existing bottler’s franchise agreements
- Coke created “Bottling investment group” (BIG) – hospital ward strategy
- In 2010, the group owned 98 bottling operations and 23% net operating revenues
- CCE incidence pricing model – drive revenue > ounces
8. Coke business model
• Franchise bottlers : acquisition
• Hospital ward : buy local underperform bottlers - fixed them – spinning off
• Anchor bottler strategy : buy independent bottlers – sell them to CCE
• Buy /Own CCE : Operate manufacturing, package and distribution
• Beer strategy : keep manufacturing and refranchise distribution
9. What’s Next?
• Buying CCE in North America
• Buying overall CCE network : fix CCE and refranchise the bottling business
• Imitate Beer strategy
• Replay hospital ward strategy
• Keep the bottling business and control the whole value chain
- NARTDs gain 20% of total industry volume
- U.S. personal expenditure per capita expect to reach $34,000 by 2020
- U.S. teen population forecast to grow to 31 million by 2020
- Still beverages expect to generate over 45% of retails sales value by 2020
