Since 2017, we’ve been on a successful journey to become a total beverage company with an ability to perform in a sustained way for the long term. Despite the many external challenges that our business has faced over the years, we have successfully deployed our All-Weather Strategy to overcome these challenges and deliver consistent U.S. dollar earnings per share growth. By leveraging our growth mindset to always seeing future opportunities and what’s possible ahead of us, we’ve been able to expand our leadership position in the beverage industry, which has created an inflection point for our company. With this All-Weather Strategy in mind, we believe that we are primed for sustained performance as we’re prepared to manage our way through the unknown challenges that have yet to come.
(a) Comparable EPS, non-GAAP
Great marketing begins with human insights – understanding what the consumer wants, making a superior tasting product, and telling the brand story in a relatable way through consumer passion points. To recruit the next generation of drinkers and continue to drive our long-term growth model, our marketing has shifted from a TV-centric model to a digital-first organization that balances local intimacy, scale, and flexibility. Our digital mix has gone from less than 30% in 2019 to approximately 60% of our total media spend in 2023. We also stood up StudioX in 2023, the digital ecosystem that brings this all together.
We created physical hubs in each of our operating units to integrate disciplines, standardize data and technology, and step-change our capabilities. Creative, media, social, and production capabilities are now operating at scale connected by our global network structure. In our previous model, it took several months to create a TV ad. Now, we're producing thousands of pieces of digital content that are contextually relevant and measuring these results in real time. We’re also becoming more disciplined in our marketing approach by consolidating our agency partnerships. Bringing it all together, we believe our new marketing approach will result in more personalized relationships with consumers, adding new drinkers and consumers to our brands while allowing for more co-creation and impactful messaging.
(a) Change from 2023 vs. 2019
(b) As presented on the Fourth Quarter 2023 Earnings Call
(c) Change from 2022 vs. 2019
Our networked organization enables us to leverage our global scale while executing with local intimacy to win in the marketplace and provide value that is consumer-centric. This is facilitated by global category leads with clear decision rights who have modernized our approach to marketing and innovation, as well as our Platform Services organization which elevates and accelerates data, analytics and insights capabilities in order to accelerate top-line and bottom-line growth. We believe this structure reduces duplication and drives scale, which in turn frees up time, resources, and energy for growth while facilitating accountability and speed of execution across the areas closest to the consumer.
Complementing our work to build great brands is our disciplined approach to innovation, in order to bring new relevant products or equipment or ideas to the table. Consumer centricity allows us to drive incremental growth through innovation. We are focusing on “more disciplined innovation”, but this does not mean “less innovation”. We are approaching innovation through different lenses and with rigorous objectives: Our pipeline for 2023 has been developed through clear routines and processes to assess the purpose and the right level of innovation. Intelligent experimentation goes beyond new flavors and brands – it also includes product, package and process. It encourages local markets to test the best ideas in a way that enables us to nurture and scale them, allowing us to expand across geographies faster than before.
It goes without saying that strong innovation and marketing would not take flight without excellence in execution. We have taken several steps in the ongoing evolution of our revenue growth management (RGM) agenda. RGM is a key commercial capability that answers critical business questions of “Within the priority categories, where is the revenue? Which package? Which price tier? Which channel? Which customer? Which competitor?”
RGM focuses on identifying revenue pools (where to play) and revenue growth strategies (how to win). It is a capability with different markets being at different points of the journey and adjusts based on the business objective and changing landscape.
Digital is beginning to play an integral role in our RGM strategy, providing competitive advantages which allow us to make better, more informed decisions faster, by translating data into actionable insights. Digital is improving our perception both at the consumer experience level as well as at the bottler level, driving improved execution.
RGM is iterative and infinite. Thus, we believe we have a long runway ahead of us.
(a) Kantar Q3 2023
Ultimately our success as a company is dependent upon our success as a system, and our bottlers’ ability to grow and thrive in the marketplace. Our integrated system execution furthers our competitive edge and propels our shared ambition to drive long-term growth.
(a) Estimated vs. 2019; (b) Ambient and chilled sparkling soft drinks
We believe there is an immense opportunity to turbocharge these flywheels by staying relentlessly close to and focused on the consumer and their evolving needs by using digital as a capability, a medium and a disruptor.
This website may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause The Coca-Cola Company’s actual results to differ materially from its historical experience and our present expectations or projections. For more information please see the risks discussed in our periodic reports filed with the Securities and Exchange Commission.
