Coca Cola 2021, why so happy?
The 100 year old brand of “happy water” seems to always be the focus in the eyes of the public and the industry.
In the turbulent year of 2021, Coca Cola rose against the trend, and its share price reached new highs, breaking the market value mark of US $260 billion. JPMorgan Chase, a famous international investment bank, also gave its own view: it is expected that Coca Cola’s strong sales will last until 2022, and its rating will be raised from neutral to overweight. In 2020, Coca Cola’s large layoffs once caused industry concerns and bad mouthed arguments one after another. What has Coca Cola done in the past year to get it out of the trough?
Source: Coca Cola
In the face of the epidemic situation, it continued to grow
in the first three quarters
JPMorgan analyst Andrea Teixeira said in a report that the scheduled reopening of buy and drink consumption (accounting for about half of the company’s global sales) and flexible pricing have helped Coca Cola’s market value soar. The most supporting force should be the financial report released by Coca Cola. After experiencing a year-on-year increase of 5% and 42% in revenue in the first and second quarters respectively, the financial report in the third quarter showed that Coca Cola’s revenue soared 16% to US $10.042 billion, higher than the market expected US $9.752 billion; The net profit was US $2.475 billion, a year-on-year increase of 42%.
In terms of sales volume, the global single box sales volume increased by 6% year-on-year, higher than the same period in 2019, mainly driven by developing markets and emerging markets. Single box sales in the Asia Pacific market increased by 3% year-on-year, equalling the performance in the same period in 2019, mainly driven by the Chinese and Indian markets; In terms of categories, Coca Cola and flavored soda led the sales growth in the Asia Pacific market. In terms of market share in terms of value, Coca Cola’s share in the non-alcoholic ready to drink beverage market has increased, and its share in home and outdoor channels has increased, and its overall performance is better than that in the same period in 2019.
With the efforts of vaccination and various parties, the business and market order of most countries in the world has gradually returned to normal, which has driven the performance growth of Coca Cola. However, looking back on Coca Cola’s performance, we will find that even at the most tense moment of the global epidemic, the beverage giant still showed enough tenacity – Coca Cola’s revenue performance exceeded expectations in the past nine quarters, and its profits exceeded expectations in 11 quarters.
James Quincey, chairman of the board of directors and CEO of Coca Cola, said, “The company’s strategic transformation enables us to effectively respond to changes in the external environment and rise strongly in special times. We are raising the annual performance guidelines to accurately reflect the good growth momentum of our business. Although the pace of global market recovery is not synchronized, we are still continuing to invest to promote the long-term development of the system. We have strong system synergy and network-based organization It is helping our brand and market release greater potential. “
In the financial report, Coca Cola raised its performance guidelines for the whole year of 2021, reflecting its optimism about its own prospects.
At the earnings conference call, Zhan kunjie further said that the continuous improvement of performance benefited from the smooth promotion of strategic transformation, which effectively promoted the company’s product innovation and marketing efficiency. “Following this strategy, we are continuing to invest in brands and products loved by consumers, and have achieved initial results.” Reviewing the performance of Coca Cola in 2021, we can find that what Zhan kunjie said is true.
Invest in consumer favorite brands and products,
Coca Cola proposed to become a “full category beverage company” in 2016, and then accelerated its layout in the fields of tea beverage, coffee, dairy products, fruit juice and bottled drinking water outside the soda beverage business, and continued to create or acquire products in line with the dietary trend of the local market. Zhan kunjie concluded at the third quarter earnings conference call that “investing in brands and products loved by consumers has achieved initial results.”
In November 2021, Coca Cola, which previously owned 30% of bodyarmor, announced that it would acquire all the control rights of sports manufacturer bodyarmor for us $5.6 billion (equivalent to about 36 billion yuan), becoming the largest brand acquisition in Coca Cola’s history. Bodyarmor can supplement Coca Cola with sports drinks and hydrating products. Its sales have been growing continuously and has great growth potential. Bodyarmor, founded in 2011, increased by 216.34% year-on-year in the first year after the capital injection of NBA star Kobe Bryant, shaking the absolute market position of Gatorade under Pepsi Cola in sports drinks. Zhan kunjie highly recognizes the potential of bodyarmor. He can not only grab share from friends, but also bring many new powders to the sports beverage circle to promote the growth of the whole market.
For Costa coffee, which was acquired by US $5.1 billion, Zhan kunjie said that it is unlikely that Costa will actively follow up in the face of the centralized outbreak and crazy opening of new coffee brands in 2021. Because its strategy is not just to run coffee shops and catch up with others in this highly dispersed industry. Coca Cola positions Costa more as a coffee platform. In addition to the important role of stores, there are smart coffee machine Costa express and a full set of coffee solution “quick selection PTS” including coffee beans, machines and signs. In September 2021, Costa China’s official wechat announced the launch of a complete set of coffee solution “Costa coffee · quick selection” project for end B. In the Chinese market, Costa Express has entered a variety of channels, including chain hotels, high-speed service areas, gas stations, cinemas, office buildings, etc.
In the Chinese market, fast selection is a relatively young business of Costa, but the demand for coffee outside the store it aims at is rising. The report on China’s foreign coffee released by yingminte last year pointed out that the epidemic has prompted consumers to form the habit of buying “take out” coffee. Inminster expects that the average annual compound growth rate of China’s foreign coffee market is expected to reach 11.0% from 2020 to 2025. Industry sources said that its goal is to have a “four digit level” of outlets next year. At present, Nestle, Ruixing and other enterprises are also increasing their weight. I wonder whether Costa can achieve this goal.
In addition to paying attention to the coffee delivery business, Coca Cola HBC also acquired a 30% minority stake in Casa del Caff è vergno, which is described as one of the oldest Coffee Roasters in Italy. The acquisition will enable Coca Cola HBC to strengthen its coffee product portfolio with the help of Caff è vergno’s products and will join its existing Costa coffee series.
Tea, coffee and wine should have:
Shangxin continues to practice the strategy of “full category drinks”
The third quarter earnings report of Coca Cola company shows that the sales of Coca Cola, flavor soda, nutritional drinks, fruit juice, dairy products and plant-based drinks have increased. This depends on Coca Cola’s ability of system coordination and continuous innovation, which can quickly and steadily promote the “comprehensive beverage” strategy.
The responsiveness to different local markets and the strong alliance with partners are important factors that constitute the synergy of Coca Cola system. In September 2021, keniu dairy products Co., Ltd., a joint venture with Mengniu, launched the “xianfeile” brand, which is a powerful example, which not only enables Coca Cola China to break the barriers of the dairy market and enter the low-temperature milk market, but also more comprehensively practice the “whole product beverage” strategy.
Photo source: Snack generation
As xianfeile’s first overseas market outside North America, xianfeile’s first three products in the Chinese market are original high-power nutritional milk – full fat white milk, low-fat white milk and chocolate milk. Thanks to the “UF purification and ultrafiltration technology”, xianfeile has higher protein and calcium content, zero lactose and relatively long shelf life. In the overseas market, it is favored by consumers with high consumption ability because of its natural high nutrition.
Photo source: Xianfei Lotte flagship store
In December, “Zhibai said flagship store” selling Coca Cola plant drinks was launched on tmall. Brands on sale include coarse grain king, sunshine everywhere, adez, etc. at present, only plant protein drinks are sold. As an important plant-based beverage platform for Coca Cola in China, the acquired coarse grain King actively arranged the plant-based track. In 2021, the coarse grain King launched Zhibai said Oatmeal Milk cereal beverage, Zhibai said coconut milk and Oatmeal Milk, and zhengu said 3 × 3 oatmeal mixed grain beverage and other products, and the existing classic grain based products have been upgraded. Coca Cola China said that coarse grain king has basically completed the new product planning of many plant-based categories such as oats and coconuts this year. Behind Coca Cola’s overweight plant base is the explosive growth momentum of this category. According to the 2020 plant protein beverage innovation trend released by tmall new product innovation center, plant protein beverage will develop rapidly in 2020, with a sales growth rate of 965%.
Photo source: Zhibai said tmall flagship store
Coca Cola has publicly stated that “hot drinks are one of the few categories of the company without a global brand”. In the winter of 2021, Coca Cola introduced two new hot drinks: Chevrolet milk drink and Coca Cola ginger +. As the first new milk tea launched by Coca Cola, xuefeili milk tea selects high-quality tea base with imported milk source, 0 trans fatty acid. Coca Cola ginger + is the world’s first soda that can be heated for drinking. It has insight into the characteristic needs of Chinese people who believe that hot drinks, especially ginger, can drive away the cold and warm up, and draws lessons from the way people use Coca Cola ginger to drive away the cold in daily life. Coca Cola ginger + heated in the microwave oven for 90s, you can enjoy the classic taste of Coca Cola ginger, while retaining the smooth experience of soda, spicy and sweet, warm but not spicy.
Although investors laugh that there are too many low alcohol wines, young women are not enough. However, as an emerging young consumer category, low alcohol liquor has a huge potential market, which has attracted traditional beer and even beverage manufacturers to accelerate their entry. In 2021, Coca Cola successively launched “topak” hard Su sparkling wine and “lemon road” Japanese lemon sparkling wine in China. As the first alcoholic beverage launched by Coca Cola in mainland China, topaker is made of gluten free alcohol and soda bubble water. It has low alcohol (4.7% vol), low sugar, zero fat and natural fruit aroma.
Source: Coca Cola tmall flagship store
Lemonade was a great success after it was listed in Japan in 2018. Its juice content is 10%. The crushed lemon pulp is pickled in Shaojiu and mixed with bubbles to reconcile the taste. Feel the sour and sweet of lemon between lips and teeth, and the bubbles give a refreshing and stimulating taste, just like being made in a wine house. At present, there are three flavors: Signature lemon, salt lemon and honey lemon. Unlike Coca Cola, although China launched topac, it is only sold through online channels. Lemon road is the first alcoholic beverage distributed by Coca Cola through the bottler system in China, which seems to mean that Coca Cola’s action this time is no longer a test.
Source: Coca Cola tmall flagship store
Another track for Coca Cola to enter China in 2021 is soda. Its brand Chunyue added two functional soda drinks that claim “0 steam, 0 sugar and 0 fat” in February 2021. The B vitamin niacin, which is indispensable in energy metabolism, is added to the little green bottle soda. In addition to niacin, the little blue bottle soda also adds zinc to help improve appetite.
As the category with the largest sales volume of Coca Cola, carbonated drinks have been continuously optimized and upgraded. There were more parties at the end of the year. Zhejiang Swire Coca Cola launched 2L sugar free Sprite, 0 sugar and 0 card for easy sharing. In the cold winter, Coca Cola also launched a new 2L sprite spice Cranberry flavor winter limited edition in the United States. In order to make Zero sugar Cola taste more like ordinary coke, Coca Cola has optimized its taste and existing formula, but the ingredient list and nutrition label remain unchanged. In addition, the newly packaged Zero sugar Cola is based on the Coca Cola logo and red, the black font marks zero sugar, and the words “now more delicious” are printed on the can body and bottle body.
Costa, xianfeile, topak and lemon road mentioned above were introduced according to China’s market conditions after they were deeply loved by consumers after they were listed abroad. Therefore, Coca Cola’s new products abroad in 2021 may also enter China in the near future. In February 2021, Japan’s Coca Cola launched a new functional tea drink “body odayaka tea W”, which contains GABA, which can help improve memory and relieve hypertension. The tea drink launched by Coca Cola in the United States comes from its brand honey tea. It mixes organic Madai tea with organic fruit juice, and each can contains 80 mg of caffeine. Another new product in the U.S. market is the powerade sports frozen stick for sports beverage consumers, which is jointly launched by Coca Cola and jel Sert, a frozen stick manufacturer. These cryosticks use powerade’s electrolyte solution to help replenish the electrolyte lost in sweat.
Source: (Japan) food industry news
Create small fun and follow the general trend:
Coca Cola’s marketing keeps going
As the marketing originator of global FMCG category, he invented film embedded advertising, proposed star endorsement, and let the president become the spokesperson. Coca Cola is a “required course” for every new marketing person. Whether it is to create a small interest, trigger a small emotion, or respond to major events and catch up with the general trend, Coca Cola will always have a way to get out of the circle, get waves of publicity and build brand strength. For example, in order to make everyone have pink warmth in winter, Coca Cola launched a limited temperature change bottle in the winter of 2021. When the temperature is lower than 4 ℃, pink love will appear on the coke bottle.
At the press conference before the 2021 European Cup, Ronaldo refused to share the same frame with Coca Cola. The huge butterfly effect evaporated the market value of $4 billion immediately after half an hour. At the subsequent press conference, some stars jokingly imitated Ronaldo. The French midfielder bogba removed the sponsor beer in front of him, the Italian hero rocatel removed the coke, and the Russian coach cherchesov drank half a bottle of coke in front of the camera.
Watching the excitement is not too big for netizens to follow and play the “c Luo Cola stem”.
In the face of players and netizens, UEFA told 24 teams in the European Cup not to remove sponsor drinks. Different from the tension of UEFA, Coca Cola responded generously: everyone has the right to choose their favorite drinks, and everyone has different tastes and needs, adding that “at our press conference, players will get water, Coca Cola and Zero sugar Coca Cola”. The words were generous and appropriate, highlighting the pattern, mechanically replied to c Luo, and also pushed a wave of sugar free cola. At the same time, Coca Cola also started reverse marketing in the European market: buy a family loaded Coca Cola and give a bottle of mineral water as a gift. It not only continued the popular c Luo Cola stem throughout the network, but also maintained the heat of the topic, taking this as an opportunity to achieve a great promotion.
In 2021, NFT (non fungible token) has become the word of the year from being ignored to well-known. NFT is a unique digital asset. Using blockchain technology, it can confirm the rights of digital assets in the meta universe and the Internet world. NFT digital art has repeatedly hit sky high prices in several public auctions in 2021. Naturally, Coca Cola, which “likes to follow the fashion”, can not be missed. It also launched the coke theme NFT in 2021.
On July 29, 2021, the NFT collection “Coca Cola friendship box” launched by Coca Cola in cooperation with the 3D avatar platform TAFI was auctioned on the well-known NFT market opensea platform, and the $540000 was donated to the International Paralympic Games. As the first NFT series of Coca Cola, “friendship box” includes a classic Coca Cola cooler, a customized wearable jacket that can be used in the virtual reality world decentraland, a friendship card and a sound vision device, which can play the pop of Coca Cola bottle opening, the sound of beverage pouring on ice The hiss of bubbles and the initial refreshing feeling of the entrance. The core elements of Coca Cola were integrated into NFT, and the donations from the auction were widely disseminated, which once again confirmed Coca Cola’s vision and marketing power.
Coca Cola’s first NFT auction is for charity and promotion. The subsequent launch of snowflake series NFT may mean that Coca Cola enters NFT and obtains revenue from blockchain business. In December, Coca Cola released the Christmas snowball series NFT in the form of blind box through Veve platform. This series of digital collection snowflakes feature elements such as falling snow, iconic Coca Cola, polar bear and so on. All snowball NFTs sell for $29.00. This series of NFTs can be purchased worldwide, but the probability of grabbing is very low.
Promote recovery, reduce carbon emission:
“No waste in the world” has a long way to go
Coca Cola has been claimed as the world’s largest plastic polluter by the environmental protection organization Greenpeace. The serious plastic problem threatens the health of mankind and the earth. For the recycling solution that has been criticized, Coca Cola tried a variety of solutions in 2021.
In 2021, Coca Cola launched the first bottle made of 100% plant-based plastic in history, reducing its carbon footprint by synthesizing PET plastic from agricultural products such as sugarcane and corn rather than petroleum raw materials. In order to promote recycling and promote the goal of “no waste in the world”, Coca Cola company has successively launched new packaged Coca Cola products in the Chinese market. In addition to the change of overall color matching, the word “recycling me” has been added to the new packaging, in which “recycling” is designed as two circular arrows to encourage consumers to recycle beverage bottles in a more intuitive and interactive form, Promote sustainable development.
Coca Cola in different countries has made different efforts for sustainable development. South Korea Coca Cola launched label free packaging bottles to improve recyclability. Through the flat concave carving, even if you touch it in a dark place, you know it’s Coca Cola. In Sweden, Coca Cola launched a reusable canned mobile solution at a sustainable convenience store. In cooperation with the Swedish company, we have created reusable stainless steel glasses that can refrigerate drinks for up to 12 hours. Consumers are encouraged to buy the glass or its own container, which can be filled from more than 60 flavors of Coca Cola, Fanta, Sprite and other brands, in order to let consumers reduce plastic waste.
Where will the recycled plastic bottles go? Coca Cola’s customized RPET work suit for the Chinese Winter Olympics may be the most novel destination. The set skillfully integrates the word “back” into the design, echoing the new Coca Cola package printed with “recycle me” mentioned above. The jacket fabric adopts RPET material, which has good waterproof and antifouling effect and good air permeability.
Dragged down by the epidemic, the global economy is in a downward situation of “struggle and swing”. How to move forward against the trend will further test the accumulated thickness and management determination of the enterprise.
As the world’s leader in beverages, Coca Cola has tirelessly pushed through the old and brought forth the new, promoted diversified transformation, spared no effort to influence the market, constantly explored carbon reduction measures and kept close to the trend of the times, so as to create a unique market influence and calm in the face of uncertainty. Although some measures may have little effect at present, still water flows deep and firmly believe in the value of “persistence”, which will eventually play a great role. Behind sustained growth is persistent long-term ism.
Coca Cola remains soberly optimistic about 2022. CEO Zhan kunjie once said: “in 2022, the price of raw materials may rise, and some products may be in shortage due to labor shortage and rising natural gas costs in Europe. However, the performance growth in 2021 makes us more firm in the correctness of our strategy, and we will always practice the long-term growth model consistently and sustainably in the post epidemic era.”
In 2020, Coca Cola will temporarily enter a trough;
In 2021, Coca Cola will move forward with its head held high;
2022, let’s wait and see!
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