Coca-Cola’s (KO) Management Presents at Barclays Global Consumer Staples Conference Notes

posted in: Notes | 0

All North American operations will be refranchised by the end of 2017

“in North America we are still on track to meet our accelerated objective of refranchising the entire system that we hold by the end of 2017. 2017 will be a big year for transactions, there will be a lot of favorite structural adjustments during that year.” James Quincey – President and Chief Operating Officer

 

Most refranchised US territories continue to outperform even after initial 12 months

“And in the US the vast majority of the territories we refranchise for more than 12 months continue to outperform… And that’s led to North America business in its total aggregate to maintaining what we can see to be top quartile CPG revenue performance not just in beverages but across all CPG in terms of revenue.” James Quincey – President and Chief Operating Officer

 

Globalization, urbanization, and middle class growth are driving growth in the beverage industry, and there is plenty of market share left to aim for

“I think it’s worth saying we continue to see abundant opportunity in the beverage industry. The long-term growth of the beverage industry is being propelled, yes, by globalization, urbanization, the growth of the middle class as much as that gets buffeted in the short term, it is still there as a long-term trend… there are still plenty of market shares to continue to go for and to continue our steady run of gaining market share quarter after quarter.” James Quincey – President and Chief Operating Officer

 

Variation in drink size and ingredient content while maintaining one brand is KO’s strategy for adapting to health trends

“It is about responding to…  people’s desire whether it be more natural ingredients, whether it be for the desire for less sugar, less calories, more of a treat, we have brought all these pieces together… it is about marketing smaller packages, more premium packages, more affordable small packages… They prefer to come in at 6 or 8 or 12 ounces. So the smaller packages works from revenue point of view. It also works to help shape choice from a consumer obesity point of view. The one brand strategy takes us from ineffective way of talking about four different brands and if you grew up drinking Coke Classic and you wanted to switch to Coke Zero you almost have to change brand and change your lifestyle. Now the idea of the one brand is you can enjoy Coca-Cola the whole of your life and you can have it in different product variants as you want to mix and match whether it is caffeine or sugar or whatever.” James Quincey – President and Chief Operating Officer

 

A strong premium category has emerged in water

But while we are absolutely seeing in many parts of the world is the premiumization of stratification of the water category. Whether that in some parts of the world with smartwater so smartwater is a runaway success in US. James Quincey – President and Chief Operating Officer