Coca Cola 3Q16 Earnings Call Notes

The Coca-Cola (KO) Q3 2016 Results
Muhtar Kent

It is a little unusual that developed markets outperformed developing markets

” that it is unusual. What you’ve just said is definitely – the fact that developed markets are growing at a higher pace than the developing and emerging markets, but it’s not a surprise given the volatility that we all know that is taking place. But it is a mixed bag. It’s not just a uniform, all emerging markets. Africa, for example, continues to be a very strong performer, both West Africa, led by Nigeria, but also other markets in Africa. Mexico, to name another one, so it is a mixed bag”

James Quincey

China changes rapidly

“To give you one example, a very small example, but it’s symptomatic of how fast China can change. If you go to the cafe channel in China, there are all the noodle shops up and down the streets. People go there at lunchtime. Last year, they were packed with people. This year, you go, they’re a third empty. You go, okay, maybe the economy has slowed down. No, that’s not what’s happening. The explosion of online to offline ordering and the availability of lots of people on motorbikes to deliver stuff, and the apps and the aggregator apps to buy food has seen an explosion of ordering of online and delivery food, such that there is just as many people buying from these cafes, but sometimes in some parts of China, a third of it’s being delivered to people, whether they be at work or as students. And so we’ve had to adapt our packaging. Having a returnable glass bottle in that cafe doesn’t help you with off-line delivery. So we’ve had to revamp the packaging offer so that we’re there with the right package to go where the consumer is going. And that’s a micro example of the sorts of things we have to do China to adapt to how the market is changing and is contributing to stabilization. But it is, again, as I said, a country undergoing change in its economic model and that’ll throw up new and different consumer behaviors to which we’ll have to adapt.”