Just now, Coca Cola released its fourth quarter and full year performance report for 2020. Under the huge challenge brought by the epidemic, the performance of the Chinese market has become one of the biggest highlights of the world’s largest beverage company.
“In 2020, all the staff of Coca Cola and its bottled partners will go all out to learn and adapt to the global crisis and forge ahead together. We have made gratifying progress in 2020. For example, we have taken a series of measures to accelerate the company’s transformation, which gives us confidence that we can resume growth in the next year. ” James Quincey, chairman and CEO of Coca Cola, said today.
Now, snack generation will take you to see it for the first time.
Selling more sodas in China
First, focus on the performance of the Chinese market.
The “fresh” results show that in the Asia Pacific region, Coca Cola’s single case sales fell 4% in the fourth quarter, mainly due to the adverse weather in Southeast Asia and the pressure of most markets in the region due to the epidemic. However, the financial report also mentioned that in the fourth quarter, “the sales volume of soda products in China and India has achieved steady growth.”
In terms of market share in terms of value, in 2020, the performance of Coca Cola Asia Pacific in the non-alcoholic ready to drink beverage market was the same as that of the previous year, with the share of tea and coffee growing.
James Quincey, chairman and CEO of Coca Cola
“The impact of the epidemic is different for every country. In China, Coca Cola gained market share in the fourth quarter. ” Zhan kunjie just said at the performance meeting.
In addition, xiaoshidai noted that Coca Cola mentioned in its financial report that in terms of soda products, the growth of China, Brazil and Nigeria partly offset the decline of this category in the fourth quarter.
Let’s look at global performance.
According to the financial report, in the fourth quarter, Coca Cola’s revenue was US $8.61 billion, which was in line with the market expectation; its operating profit was US $2.34 billion, an increase of 8% over the same period last year; and its earnings per share was US $0.47, which exceeded the market expectation of US $0.42. In 2020, Coca Cola’s revenue is 33 billion US dollars, operating profit is 9 billion US dollars, and earnings per share is 1.95 US dollars.
Fourth quarter performance under the new deal
“In this year, we gave priority to core brands, which led to a 1% increase in sales of Coca Cola brand products in the fourth quarter. Among them, the sales volume of Coca Cola Zero sugar products increased by 3% in the fourth quarter and 4% in the whole year. ” The company pointed out.
Looking forward to 2021, Coca Cola expects that organic revenue will achieve high single digit growth, and comparable earnings per share will achieve high single digit to low single digit growth.
Performance outlook for 2021
“Although there are still uncertainties related to the outbreak, we have a higher visibility of the future recovery and are confident that our actions will continue to mitigate the impact of the crisis.” Coca Cola said today.
Add digital and capacity
Like many food and beverage companies, Coca Cola’s digital layout in the Chinese market pressed the “accelerator” button last year due to the surge of online consumer demand since the epidemic, especially its performance on o2o has also become a “bright spot” in the financial report.
“In terms of digital channels, we continue to invest in Omni channel opportunities.” Coca Cola, for example, seized the booming trend of China’s o2o, and by focusing on excellent digital execution and the availability of core SKUs, its market share in terms of value on the o2o platform increased by three points last year, taking a leading position in the growth of China’s total digital commerce, the company said in its financial report today.
Xiaoshidai noticed that Zhan kunjie also said at the performance meeting that the epidemic situation makes digitalization more important. Coca Cola is reshaping its organization and using e-commerce more.
Xiaoshidai introduced that in the second quarter of 2020, Coca Cola China and meituan Dianping have reached a strategic cooperation. The two sides will focus on the marketing of food scenes, and carry out cooperation in multiple dimensions, including o2o marketing activities throughout the year, the establishment of Coca Cola merchant alliance at the b-end, and the establishment of the private operation position of “Coca Cola Brand hall” from the aspects of activities, consumers, merchants, etc Form real-time and visual data analysis.
In 2020, during the two e-commerce shopping festivals, Coca Cola China has also achieved good growth. Xiaoshidai learned that during the “618” period last year, the total turnover of its products on the Jingdong platform exceeded 80 million, a year-on-year increase of 34%, ranking first in the category of non-alcoholic instant drinks.
According to Coca Cola, during the “double 11” period last year, its total turnover in e-commerce channels also increased by 61% year on year. Among them, the turnover of Jingdong increased by 130%, that of HEMA increased by 178% and that of tmall flagship store increased by 121%.
Coca Cola China apparel products
Interestingly, at present, Coca Cola China is also starting a clothing business online. Xiaoshidai noticed that in January this year, Coca Cola’s flagship clothing store officially opened in tmall, selling co branded items that cooperate with global designers and fashion brands from all over the world, including sweater, baseball cap, tote backpack, etc. “In the future, we will also introduce clothes made of recycled beverage bottles.” The company told snack generation.
Meanwhile, Coca Cola China is continuing to invest in capacity expansion.
Today, xiaoshidai learned from Coca Cola that in the second half of 2020, all the six new production lines of Swire Coca Cola in China have been put into operation as scheduled, with a total investment of 250 million yuan and an annual output value of more than 1.7 billion yuan.
Previously, in May 2020, COFCO Coca Cola launched a fully automated can beverage production line in Sichuan, which is known as “the fastest fully automated production line in the global beverage industry”. It can produce 120000 cans of can drinks per hour, with an annual output of 260000 tons and an output value of 1.3 billion yuan.
Coca Cola China production line
In the next year or two, it is expected that more production lines of Coca Cola bottling partners will be built and put into operation.
Xiaoshidai introduced that the new plastic bottle production line of Swire Coca Cola in Hubei is expected to be put into production in April 2021. COFCO Coca Cola’s first plant in Guizhou and its 20th bottling plant in China will also be put into operation in December 2021. In addition, by the end of March 2020, Zhengzhou Swire Coca Cola’s capacity expansion and reconstruction of intelligent green factory project was officially signed. It is expected to be completed and put into operation within two years, with an annual output value of 2.3 billion yuan.
Transformation under epidemic situation
In today’s financial report, Coca Cola also talked about the latest progress in restructuring.
“Our new organizational structure is composed of operations division, category division, platform services and functional departments, which combines scale capability with local execution. After the reorganization, the four departments will be highly interconnected, making Coca Cola a more agile and efficient organization. ” Coca Cola said.
The company said that the new architecture will take effect on January 1, 2021 and will continue to build platform services in the first half of 2021.
Progress of Coca Cola’s new strategic initiatives
Xiaoshidai said that in August last year, Coca Cola announced the implementation of strategic restructuring, which brought about several major changes. First, the company’s previous 17 business units were streamlined into nine operational divisions. Among them, Coca Cola Greater China has become one of the nine major operation divisions.
Secondly, Coca Cola has set up five global beverage divisions, and its products are re divided into: 1) Coca Cola; 2) flavored soft drinks; 3) bottled water, sports drinks, coffee and tea; 4) nutritional drinks, fruit juice, milk and plant drinks; 5) other emerging products.
The company has previously proposed that one of the key points to accelerate the transformation is to optimize the global, regional and local brand mix, focusing on the development of “brands with scale effect and profit margin”, taking into account the scale potential of products and local consumer insight.
Finally, the company has set up a new platform service organization to support nine operation divisions and five global beverage divisions.
Five goals for 2021
As for the new organizational structure, John Murphy, chief financial officer and executive vice president of Coca Cola, said in December last year that the operations division will continue to be responsible for the performance of local markets, the category team will be responsible for managing the positioning and marketing of global brands, and the platform service organization will provide services and support for the front-end work.
“Let the category team be responsible for managing global brands, and let the operations division be responsible for local success. This is an important way for us to promote global brand building and local market execution at the same time. ” He said.
He further explained the role of platform services: “for example, finance, marketing, procurement and so on belong to general services. In the past, we used to do it in 17 business units in 17 different ways. Now we have the opportunity to highly coordinate these services, finish the work that needs to be done 17 times at a time and do it better. This is the first opportunity brought by the platform service organization. “
“The second opportunity is to make the company truly a data-driven enterprise. To achieve this, relevant services and data need to be highly centralized and shared, with clear responsible persons, so as to lay a solid foundation and provide timely support at any time, in any field and in any market where the business needs. ” Murphy said.
Product “new face”
Under the new strategy, Coca Cola China is also optimizing its product mix. Taking stock of the past year, you will find many “new faces” in its product lineup.
For example, xiaoshidai introduced that in the fourth quarter, the company successively launched a number of hot drink products, including Coca Cola ginger +, Costa Costa Costa English black tea latte milk tea beverage, Costa Costa Costa alcohol latte coffee beverage, meizhiyuan Guixiang warm pear fruit beverage, meizhiyuan miqin pomelo fruit beverage, etc.
Among them, Coca Cola ginger + is the world’s first hot drink soda of Coca Cola company, which provides a new way of drinking “hot drink soda”. “Chinese consumers are particularly fond of hot drinks. People have been drinking hot drinks for a long time, especially in winter. So in order to meet this demand, we have been steadily increasing the hot drink market in recent years. ” Coca Cola has said before.
Coca Cola’s first hot soda “Coca Cola ginger +”
The local product innovation of the beverage giant even goes further, launching more regional characteristic products.
For example, in December last year, Coca Cola China launched the meizhiyuan apple vinegar juice beverage, which was first listed in some cities in South China. “Vinegar has a long history of eating in China. Apple vinegar is a regular drink for dinner in warm southern regions such as Guangdong Province because of its refreshing taste. Our low sugar and zero fat new product meets the needs of consumers for healthy fruit juice, and better meets the drinking preferences in different scenarios. ” The company has told the snack agent.
For the township market, Coca Cola China also has more product strategies adapted to local conditions. For example, in January this year, the company launched a new year gift box customized for the township market, including soda, fruit juice, plant protein drinks and other products. “In terms of consumer communication, we are more in line with the lifestyle of villages and towns this year, and establish emotional resonance with consumers through the entertainment short video form of social media.” The company told snack generation.
Coca Cola gift box for Chinese New Year 2021
In the first three quarters of 2020, when the epidemic situation is facing greater challenges, Coca Cola China has not stopped the pace of “upgrading”.
Xiaoshidai introduced that in the first quarter, Coca Cola launched its first new product in China after it acquired Costa coffee family. Costa British classic instant coffee was launched in March last year. In addition, Coca Cola also launched new products in the first quarter, such as Yiquan peach juice soda, meizhiyuan peach juice beverage and eye-catching thick litchi flavor soda.
In the second quarter, Coca Cola China launched more than 10 new products, including huanxiang bottle series, meizhiyuan coarse grain Wang selected Hawthorn compound juice beverage, Yiquan bitter lime soda, pure Yueguo peach flavor beverage, Youcha ice shake white peach flavor flavored oolong tea beverage, Fenda Jasmine peach flavor soda, CASIA caramel flavor Jinfei latte, CASIA x onecup joint capsule coffee American series, innocent fresh fruit products, etc.
In the third quarter, Coca Cola added “members” to its product family in China, including Xingyuan 0 sugar 0 fat white peach flavor and lemon flavor fruit and vegetable extract bubble water, Costa ice extract instant coffee, South Korea imported ambassa milk flavor soda, etc.
Summary of Coca Cola CEO performance meeting
“Although the uncertainty still exists in the short term, we are ready to rise strongly after the crisis, driven by the firm enterprise intention and the strategy of” all kinds of drinks ” James Quincey said at the performance meeting today that the company’s business is expected to further improve as the new crown vaccine is more widely promoted.
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