Just now, Coca Cola, the world’s largest beverage company, released its performance report for the third quarter of 2020 and disclosed the progress of its major strategic restructuring.
Judging from this fresh report card, it is true that “the most difficult period has passed” as predicted by Zhan kunjie last quarter. Entering the third quarter, Coca Cola’s performance is continuing to improve. Specific to the Chinese market, snack agent noted that the company mentioned in the financial report that Coca Cola’s Soda business in China grew strongly in the third quarter.
At the same time, xiaoshidai learned from Coca Cola today that the new president of Coca Cola Greater China, vamsi Mohan thatI, took office earlier this month. The appointment is part of the company’s first major restructuring plan announced in August.
“Throughout this year’s crisis, our system has been focused on its full range beverage strategy. We are accelerating the transformation that is already underway so that our company can recover faster than the macro economy. ” “Although there are still many challenges ahead of us, I am confident that we are on the right path with our progress in the quarter,” said Jan kunjie, chairman and CEO of Coca Cola, today
James quinkey, chairman and CEO of Coca Cola
Now, the snack generation will take you to have a look at it for the first time.
First, focus on the performance of the Chinese market.
“In the third quarter, we saw progress in the recovery of the business.” At the beginning of the analysts’ meeting held tonight, Zhan kunjie said that although some markets still adopted blockade measures, especially in some markets where Coca Cola had the advantage of outdoor channels, “however, I am encouraged by the company’s system execution response.”
He said that the company’s performance rebounded from the pressure of the blockade peak in the third quarter, and the world gradually entered the “recovery curve”. He particularly pointed out that Coca Cola’s e-commerce sales have doubled this year, and praised the performance of the Chinese market. “In the Asia Pacific region, China is returning to strong growth.” Zhan said.
Coca Cola’s Chinese product “whole family”
The company noted in its financial report that in the Asia Pacific region, single box sales fell by 4% (down 18% in the last quarter, and the downward trend continued to improve), which was mainly due to the restrictive measures taken by the Indian and Japanese markets due to the epidemic situation, while “in the Chinese market, aerated soft drinks grew strongly”.
In order to further drive growth, Coca Cola China is also continuing to invest in capacity expansion and product and business innovation.
Today, xiaoshidai learned from Coca Cola that in the third quarter, Hubei Taigu Coca Cola’s new production line has completed the bidding, and is expected to be officially put into production by the end of April next year. In addition, in July this year, COFCO Coca Cola started construction of its first plant in Guizhou, with an estimated total investment of 270 million yuan, which is planned to be completed and put into operation by the end of 2021.
Coca Cola’s automatic beverage production line
In terms of new products, the snack generation noticed that in the third quarter, Coca Cola still maintained a certain “new” rhythm in the Chinese market, and successively launched several new products, including refreshing element 0 sugar 0 fat white peach flavor and lemon flavor fruit and vegetable essence bubble water, Costa ice extract instant coffee, and South Korea imported Anbar milk flavored soda.
In addition, according to the introduction of ready to drink coffee in September this year, Costa Costa Costa and COFCO Coca Cola extended their strategic cooperation to the field of self-service coffee machines, looking for new growth points in the coffee market. Both sides said that in the future, they will jointly promote the layout of “Costa coffee · quick selection” self-service coffee machines in various channels in China.
The snack agent noted that Zhan kunjie also pointed out at the meeting that Coca Cola would continue to operate Costa coffee platform well. According to reports, up to now, nearly 100% of Costa coffee stores in China have been reopened. At the same time, in the global market, the awareness and distribution of Costa instant coffee are better than the development level of its category.
Let’s look at global performance.
Results show that the third quarter, Coca Cola company performance has improved significantly compared with the previous quarter. Net income was $8.652 billion, up 21% month on month, exceeding market expectations of $8.34 billion; operating profit was $2.298 billion, up 16% month on month; earnings per share (non general accounting principles) was $0.55, exceeding market expectations of $0.46.
During the period, global single box sales decreased to 4% year-on-year. The sales volume of Coca Cola Brand increased by 1% in this quarter, while that of Zero sugar Coca Cola increased by 7%. Coca Cola pointed out in the financial report that since the last quarter, the trend of global single box sales has been improving, and the global single box sales volume has dropped to low single digits year-on-year since October.
“While the company is satisfied with the continuous improvement, its ultimate impact on short-term performance remains unclear given the uncertainty of the epidemic, including its resurgence in multiple markets.” Coca Cola said today.
The company said its recent strategic decisions, including optimizing product mix, innovative strategy, improving marketing effectiveness and efficiency, enhancing system collaboration and reforming organizational structure, have boosted confidence in its strategic goal of “emerging stronger.”.
China’s new Commander takes office
In recent years, Coca Cola has continued to carry out strategic transformation, and the outbreak of the epidemic has greatly accelerated all this. In order to be able to “become stronger” after the epidemic crisis, the company has formulated the strategy of “laying out the future and making a strong rise”. The five major goals include:
- Win more consumers;
- Expand market share;
- Maintain strong economic system effect;
- Strengthen the influence of stakeholders;
- Change the organizational structure to win the future.
“We have also challenged the traditional business model.” “The epidemic has made us all realize that we need to do things in a bolder way,” Zhan said today Specifically, he pointed out that in the third quarter, one of the focuses of Coca Cola was to accelerate its transformation, including optimizing its product mix and being more disciplined in its research and development.
To achieve this goal, the beverage giant has launched and started to implement relevant action plans.
First of all, we need to make major organizational restructuring. In August this year, Coca Cola announced that the original 17 business units would be reduced to 9 new operation divisions, 5 new global beverage category teams were set up to release the category development potential, and a new platform service organization was set up to support the business development.
According to Coca Cola’s strategic restructuring plan, Coca Cola Greater China region has become one of the nine major operating divisions. Earlier, in September, Coca Cola announced that vamsi Mohan thatI would be the president of Coca Cola’s Greater China region.
Under this new framework, Coca Cola’s new boss for Greater China has also been quickly put in place. Xiaoshidai confirmed from Coca Cola today that the new president has officially taken office in October 2020.
Interestingly, shortly after taking office, the foreign executive has already acquired a Chinese name with Chinese characteristics – “Wen Di”, which makes people hear the crisp sound of bamboo. It is reported that since taking office, Wendi has held an internal staff meeting, but it is not clear what the next “governing plan” is.
Vamsi Mohan thatI, President of Coca Cola Greater China
Secondly, continue to comb the product portfolio. Zhan kunjie disclosed today that the main scheme of Coca Cola’s brand portfolio has been finalized. It will be composed of more than 200 global, regional and local brands, so as to help the company become a completely consumer centered beverage company and bring profits in the long run.
This means that Coca Cola, which currently has about 500 brands, will cut its brands by more than half. According to the presentation presented by Coca Cola at the performance meeting today, 78% of the retained brands belong to local brands, while regional brands and global brands account for 11%.
Today, Coca Cola described in the financial report that in the process of continuing to pursue to become a “full range beverage company”, those global or regional brands retained will be the most potential brands in “expanding consumer groups, increasing consumption frequency and improving Coca Cola system profit”.
From the perspective of category, drinking water and sports beverage products are the most favored by Coca Cola company, accounting for 35%. In addition, it is the company’s “start-up” soda, the number of brands accounted for 29% of the retained products. The third is juice, dairy products and plant base, accounting for 21%. The rest of the coffee and tea, other types together accounted for 15%.
“There are two ways to deal with brands that have not been selected, either by retiring them or by converting them into regional brands.” Zhan said. Typical brands include Zico coconut water, tab soda, and oddwalla juice.
Third, expand consumer centered innovation. Coca Cola said in its financial report today that it is committed to exploring new products in an active beverage segment. For example, it launched the topo Chico hard seltzer in the third quarter, which is currently sold in some cities in Latin America and is expected to be listed in the United States on a large scale in the first half of 2021.
Finally, accelerate marketing transformation and improve efficiency and effectiveness. “In any case, there has been a digital or experiential trend. In essence, the way consumers interact, the way they want to interact, has been developing. We also need to keep up with the trend of investment, including how to spend money, how to organize employees so that the money we spend can achieve better results, and how to reduce losses without even spending money on consumers. ” Zhan kunjie has said before.
Today, he also pointed out that Coca Cola’s marketing, purchasing and finance teams need to work together. “It’s not a top-down approach to cost reduction, we don’t have a goal of saving money. What we need is to improve processes, eliminate redundancy, optimize spending, and invest money in our brand. “
Mr. Zhan said Coca Cola is becoming an enterprise that makes good use of internal cooperation and global scale to win in the local market. “We hope that such a new organization will start to work next year.” He said the company has reduced its 17 business systems to nine, which will help speed up the decision-making process while maintaining its position in the local market.
At present, as the third largest market of Coca Cola in the world, China is undoubtedly one of the most important strategic markets for the beverage giant. “Coca Cola is confident in the potential of China’s market, will be more deeply rooted in China, continue to invest, and firmly fulfill its commitment to long-term development in China.” Coca Cola said today to the snack generation.