Refreshing A Thirsty World
Chief Financial Officer
CAGNY 2012
Gary Fayard
Forward-Looking Statements
This presentation 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 actual results to differ materially from The Coca-Cola Company’s historical experience and our present expectations or projections. These risks include, but are not limited to,
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2
Our 2020 Vision Is Working
3
We are Leading the High Growth NARTD Industry. . .
8B Incremental Unit Cases
Since 2009
$65B Incremental Retail $ Value
Since 2009
2009
2010
2011
2009
2010
2011
Industry Unit Case Volume
4
Industry Retail $ Value
. . . and We are Gaining Market Share
Worldwide Retail Volume Share Change 2011 vs. 2009
Global
NARTD SPARKLING STILL
+0.3
International
North America
Worldwide Retail Value Share Change 2011 vs. 2009
Global
NARTD
+0.6
International
North America
SPARKLING
STILL
5
Our 2020 Vision is Delivering Results
Unit Case 1 Volume Growth Operating 2 Income Growth
4%
Long-Term Growth Target
3%
8%
Long-Term Growth Target
6%
3%
5%
4%
7%
11%
12%
2009
2010
2011 AT WORK
2009
2010
2011 AT WORK
1 Excluding
2 Comparable
the Benefit of New Cross-Licensed Brands in 2010 & 2011 (primarily Dr. Pepper) Currency Neutral
6
Cash, It’s Still the Real Thing
Cash from Operations Nearly 2010-2011
*
• Marketing
• Capital Assets • Dividends
• Bolt-On Acquisitions
• Share Repurchases
2010
* Excluding pension
2011
contributions of $769 million
7
We are Investing in a Brand Portfolio Like No Other
2010-2011 Direct Marketing Investments
8
We are Investing in Our Future
2010-2011 Capital Investments
Billion
2010
In the story hunger author Anne Lamott introduces herself and her struggle with food addiction and her battle with eating disorders that she suffered in the early part of her life. In this story she talks about her life how she was growing up, her personal obsession with food, her battle with alcoholism, and addiction to eating. Lamott in the short story hunger also covers her struggle for life with the eating disorder bulimia. The author throughout her story learns that her addiction and her battle with alcoholism were only symptoms of deeper lying problems, and eventually the manner in which she overcame all of that against all odds. The road was not simple but as you
The 2 companies already strong brand equity, increasing marketing budget for their flagship brands and constant innovation (e.g. freestyle soda machine) should retain customers’ loyalty. By diversifying their product portfolio through new acquisitions and introduction of a variety of new CSDs such as diet products that already proved their profitability and non CSDs, the two companies should be able to respond and adapt to the customers changing demand and preferences such as increasing health concerns, rising interest in sports and nutritional drinks. The international market remains a key opportunity for Coca cola and Pepsi to sustain and increase their profitability. Even though Coca Cola is already a leader on the international level with 80% of sales in contrast with roughly 50% of sales for Pepsi, many foreign untapped markets are still far from being saturated and constitute a good profitable business, especially within the rising economies in Asia, Africa and the Middle East as growth means higher purchasing power. Finally, the two companies’ consolidation of their bottling system again in 2009 should cut down operating costs and increase
Soda Pop Organics, Inc. has a future steeped in financial growth and investments. In four years, Soda Pop Organics, Inc. is projected to not only increase its assets by nearly $2.35 million, but increase equity in the company by $1.85 million, leading to an overall projected company growth of four times what it is today. The company’s goal that is contributing to the rapid projected growth is that they intend to have their product in every major market in the world by 2025. To accomplish this lofty goal, the company is taking a worldwide approach by investing globally. Some of these global investments include purchasing 25 new bottling and distribution centers across every continent. They also have promised to invest over $1.5 million a year
In order to achieve the maximum degree of success that is possible within the context of the consumer marketplace, it necessary that a company possess a profound commitment to the meeting of consumer needs and the cultivation of consumer satisfaction. In order to properly pursue such a commitment, it is frequently necessary that a company adjust its overall set of strategic priorities with regards to the requirements that are necessary in order to meet the company’s goals and objectives. Coca-Cola is a firm that is committed to a comprehensive vision concerning the
Since its creation in 1886, Coca Cola has had steadily increasing sales year after year making Coca Cola not only a house hold name but making them the largest soda manufacturer in the world. Recently though they have seen a decrease in sales. In the past five years Coca Cola’s yearly sales revenues have been consistently in between 40 to 50 billion dollars. Beginning in 2011 with 46.77 billion, reaching its peak in 2012 with 48.07 billion and steadily declining in the following years with 46.7 in 2013, 45.93 in 2014, and 43.65 in 2015. “Over the last 20 years, sales of full-calorie soda in the United States have plummeted by more than 25 percent. Soda consumption, which rocketed from the 1960s through 1990s, is now experiencing a serious and sustained decline” (Sanger-Katz, 2015). The main reason for this decline in sales are health concerns. People are becoming more health conscious and are trading sodas for healthier alternatives. Even the sales of diet sodas are taking a hit with many people concerned with the consumption of artificial sweeteners. As a way to appeal to those health conscious individuals Coca Cola began producing healthier alternatives to their beloved sodas such as teas, sports drinks, flavored waters, and products containing real sugar instead of high fructose corn syrup. They also began making smaller servings such as mini cans and bottles which appeals to those who want to cut down on their soda intake. Another reason for the decline in sales is the
Long term growth targets for Coca-Cola continue to estimate moderate growth increases in developed markets spurred by consumer loyalty to sparkling beverages with increased consumption of new/differentiated still beverage offerings. Moderate to significant growth increases are expected in emerging markets as Coca-Cola invests more heavily in those areas in an effort to dominate those markets with Coca-Cola branding. Earnings per share estimates for 2013 are comparable to current 2012 quarterly results with no expected large
In 2013, the strengths begin at Coca Cola that they had “the best global brand in the world in terms of value over $77,839 billion” (Stuart Elliott, 2013). Coca Cola is top rank in the market share for beverages at 42% as Mark Lin Discusses (2014).The company is not only involved in the fizzy drinks sector as it has become more aware of the health issues and concerns.
According to the 2011 annual report filings by Coca-Cola with the U.S Securities and Exchange Commission, a significant differentiation and business-level strategy employed by the company is the use of technology advances in creating cost-friendly and efficient means of drink production. Furthermore, the commitment to innovation and sustainability has
Several factors contribute to poor nutritional status among children, such as shortage of food, cultural feeding practices and negative food beliefs within in the households. UNICEF reported in 2015 that under-nutrition accounts for 40% of children’s death under the age of five. Additionally, it stated that 33% of children are chronically undernourished, 5% are severely undernourished, and 14% are underweight. Sadly, chronic under-nutrition permanently stunts the growth of the body and brain of a child.
There is no question that Coca-Cola is poised for economic growth and stability (need citation). It has 30% of the market share (need citation). It is expected to increase its market cap to $90 billion by the year 2020. It has increased its dividend payments every year for 54 consecutive years. The company has the 72nd highest growth rate out of 182 businesses with 25+ years of
The ozone layer serves as protection of the Earth from the sun’s harmful ultraviolet rays. Over a span of decades it has been found out and continuously theorized that the said layer is thinning or depleting. This depletion is speculated by scientific experts to have negative effects to human beings and most importantly to the environment.
Similarly, the Coca Cola industry has used techniques much like Follett’s to help create their own mission, vision, and set of values for its employees. In fact, according to Coca Cola, they have created a 2020 Vision which states, “The world is changing all around us. To continue to thrive, we must look ahead. That’s what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a “Roadmap” for winning together with our bottling partners.” Coca Cola is a multinational industry that has set an incredibly high standard for its products which adds a medium rating of pressure within the industry. In addition, for how large of an industry Coca Cola has become, it still has a high growth rating. The soft drink industry analysts believe the beverage industry will increase by $300 billion between the years of 2015 and 2020. Furthermore, while the force of new entrants may not have a lasting effect on the industry, Porter’s second force of suppliers may have a much stronger influence on Coca Cola.
"Innovation is certainly always part of the Coca-Cola Company and is why they advertise different styles of bottles, prints on cans, and items which do not have anything to do with a drink such as stuffed animals, T-shirts and caps. Producing different kinds of products involve technology. If a new product is planned to be launched, not only research for demand and possible sales prices should be conducted through an opportunity analysis. In order to be cost efficient and at least break-even, the kind of production line and machinery needed to produce the item has to be assessed and
The company itself, affiliates, subsidiaries, licensed distributers and bottlers are a risk factor to Coca Cola. Bottlers generate a significant portion of Coke’s net operating revenues by selling concentrates and syrups to independent bottling partners. In 2009, approximately 79 percent of our worldwide unit case volume was produced and distributed by bottling partners in which the Company did not have a controlling interest (ITEM 1A. RISK FACTORS, 2010). The company also operates internationally which is additional business and financial risk to the company. International economies and political environments become a risk to an American investor when considering purchasing securities. Some business risk of the company includes the availability in Coca Cola’s special ingredient of extracted coca leaf, the sustainment of a network that spans 200 countries, health concerns that cause a reduction in market demands. For the company to ensure that it has enough cash flows must be able to have the infrastructure to handle the large amount of demands.
Coca Cola’s Company competes in the nonalcoholic beverages segment of the commercial beverages industry. Based on internally available data and a variety of industry sources, we believe that, in 2005, worldwide sales of Company products accounted for approximately 10 percent of total worldwide sales of nonalcoholic beverage products. The nonalcoholic beverages segment of the commercial beverages industry is highly competitive, consisting of numerous firms.