Streamlined Portfolio of Brands, Marketing and Innovation to Power Coke’s 2021 Strategy

The Coca‑Cola Company is emerging from the pandemic poised for growth with a leaner lineup of high-potential brands and a more disciplined, consumer-centric approach to marketing and innovation, Chairman and CEO James Quincey said Feb. 19 at the Consumer Analyst Group of New York (CAGNY) virtual conference.

“We went into this crisis in a strong position,” Quincey said on Feb. 19. “We had some good results in 2018 and 2019 and, importantly, we leveraged the 2020 crisis as a catalyst to accelerate the business transformation that was already underway.”
 

Step one was a deep, data-driven analysis of the company’s global beverage portfolio that ultimately trimmed its total number of master brands from 400 to approximately 200 global, regional and local offerings with strong scale potential.   

“We've recentered ourselves on being consumer-centric with our marketing and being powered by greater effectiveness and efficiency, complementing that with a robust innovation pipeline balancing big bets with ongoing intelligent experimentation,” Quincey said on Feb. 19. 

Global category leads will focus on building the newly optimized portfolio – which spans all drinking occasions and dayparts – through insights-powered marketing that “tells a brand story in a relatable way”.  

One of the first major outputs of the company’s revamped marketing model is the upcoming launch of the first-ever global campaign for Sprite, “Let’s Be Clear”, which will roll out in more than 50 markets this year with creative including TV and digital films, outdoor and print advertising, and user-generated digital and social content. 

“It's a powerful example of how we've leveraged our networked way of working,” said Quincey, adding that the campaign will promote the recently reformulated Sprite Zero. Markets around the world came together to align strategically and seek common ground, based in human insight and focused on occasion-based marketing.  
 

A more rigorous focus on resource allocation will boost the impact of “fewer, bigger” integrated campaigns and fuel brand reinvestment by consolidating media planning, streamlining agency rosters and reusing marketing assets aligned with passion points like music and gaming. 

The company’s 2021 innovation pipeline will include a 40% increase in projects, managed with an equally disciplined approach. 

“Innovation must be more than flavor extensions,” Quincey said. “It can also be tech-driven, or include enhancing our packaging or formulas, but in the end it must be consumer-centric.”
 

He added, “We're looking, yes, for more innovation – but also more impact.”  

While the bulk of the company’s innovation efforts will focus on core categories, teams will continue take a test-and-learn approach in adjacent, emerging segments through offerings like Costa coffee and forays into alcoholic beverages via Lemon-Do (Japan) and Topo Chico Hard Selzer.  

Chief Financial Officer John Murphy said these core strategies will convert top-line growth into sustainable value creation. “Our emerging stronger priorities and the acceleration of our transformation have been designed to get us back to this long-term growth algorithm as fast as possible,” he said.  

The pandemic accelerated Coke’s transformation into a digitized, data-driven organization that can execute marketing, commercial, sales and distribution strategies in both the online and physical worlds. A new appointed O2O (online-to-offline) digital transformation officer and new chief data officer, combined with digital tools, will facilitate more efficient marketing, brand building and improved execution.  

“We've reshaped the organization around this opportunity,” Quincey said. “It's still early days, but these digital investments are starting to transform logistics, transform the entire distribution model, transform client relationships, and transform how consumers engage with the company and our brands.” 

Forward-Looking Statements 

This press release 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. These risks include, but are not limited to, the negative impacts of the COVID-19 pandemic on our business; obesity and other health-related concerns; evolving consumer product and shopping preferences; increased competition; water scarcity and poor quality; increased demand for food products and decreased agricultural productivity; product safety and quality concerns; perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage products or packaging materials; an inability to be successful in our innovation activities; an inability to realize the economic benefits for our reorganization and related reduction in workforce;  an inability to protect our information systems against service interruption, misappropriation of data or breaches of security; failure to comply with personal data protection and privacy laws; failure to digitize the Coca‑Cola system; changes in the retail landscape or the loss of key retail or foodservice customers; an inability to expand operations in emerging and developing markets; fluctuations in foreign currency exchange rates; interest rate increases; an inability to maintain good relationships with our bottling partners; a deterioration in our bottling partners’ financial condition; increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters, including the outcome of our ongoing tax dispute or any related disputes with the U.S. Internal Revenue Service; increased or new indirect taxes in the United States and throughout the world; an inability to successfully manage the possible negative consequences of our productivity initiatives; an inability to attract or retain a highly skilled and diverse workforce; increased cost, disruption of supply or shortage of energy or fuel; increased cost, disruption of supply or shortage of ingredients, other raw materials, packaging materials, aluminum cans and other containers; increasing concerns about the environmental impact of plastic bottles and other plastic packaging materials; changes in laws and regulations relating to beverage containers and packaging; significant additional labeling or warning requirements or limitations on the marketing or sale of our products; unfavorable general economic conditions in the United States; unfavorable economic and political conditions in international markets; unfavorable outcome of litigation or legal proceedings; conducting business in markets with high-risk legal compliance environments; failure by our third-party service providers and business partners to satisfactorily fulfill their commitments and responsibilities; failure to adequately protect, or disputes relating to, trademarks, formulae and other intellectual property rights; adverse weather conditions; climate change and legal or regulatory responses thereto; damage to our brand image, corporate reputation and social license to operate from negative publicity, whether or not warranted, concerning product safety or quality, workplace and human rights, obesity or other issues; changes in, or failure to comply with, the laws and regulations applicable to our products or our business operations; changes in accounting standards; an inability to achieve our overall long-term growth objectives; deterioration of global credit market conditions; default by or failure of one or more of our counterparty financial institutions; an inability to renew collective bargaining agreements on satisfactory terms, or we or our bottling partners experience strikes, work stoppages or labor unrest; future impairment charges; multi-employer pension plan withdrawal liabilities in the future; an inability to successfully integrate and manage our company-owned or -controlled bottling operations or other acquired businesses or brands; an inability to successfully manage our refranchising activities; failure to realize a significant portion of the anticipated benefits of our strategic relationship with Monster Beverage Corporation; global or regional catastrophic events; and other risks discussed in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2019 and our subsequently filed Quarterly Reports on Form 10-Q and other reports, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements.