Remarks presented at Beverage Digest -
Wall Street Smarts
New York
By Katie Bayne
President and General Manager,
Sparkling Beverages
Coca-Cola North America

 
Good morning everyone.

Today I want to talk about how Coca-Cola is "Winning with Well-Being."

As a wife and mom, this is especially important to me because I'm passionate about the well-being of my family.

And as a Coca-Cola employee, winning with well-being is a natural extension of our mission... "to refresh the world, inspire moments of optimism and happiness, creating value and making a difference everywhere we do business."

Winning with well-being is the right thing to do... but it's also what our consumers and customers are expecting. In fact, research indicates that they're more health conscious than they've ever been.

So Coca-Cola is giving consumers what they want and deserve -- brand and package choices; clear, accurate, transparent information; and significant investments in physical activity programs that support healthy and active lifestyles.

Before I move on, it's important to note that we understand that our nation is facing a very real health challenge right now -- obesity.

Obesity is a serious and complex health problem, and solving it requires the collective efforts of all of us -- business, government, society.

So we agree with First Lady Michelle Obama when she said last week, "Everyone has a role to play in this and I think it's up to communities and families to figure out what role they can play, what role they should play."

We believe in this concept of collective accountability.

What we don't believe is that taxes, regulations and restrictions on our industry will do very much to solve the obesity challenge.  

There are some people suggesting the obesity problem is a sugar-sweetened beverages problem. They think that somehow, by singularly attacking sugar-sweetened beverages, they are doing something about obesity. That's not true.

Sugar-sweetened beverages have calories and carbohydrates, and so do most foods and drinks. When it comes to obesity and weight gain, it's primarily a problem of calorie imbalance -- specifically, consuming more calories than those burned through physical activity.

We all know that eating or drinking anything to excess will cause you to gain weight. But before our critics point the finger at sugar-sweetened beverages, they should consider this:

During the period of rapid obesity increases, sugar intake from beverages was decreasing. Between 1999 and 2010, sugars from soda consumption decreased by 39%, but the percentage of obese and overweight children and teens increased by 13% and by 7% for adults.

So singling out single brands or beverages is not going to help the situation. Working together in partnership will.

The Coca-Cola Company is actively and proactively working to help bring solutions to this challenge in a holistic way. We can do that because we have a timeless commitment to enhance well-being; and we have the products, programs and an operating philosophy that are bringing our commitment to life.

That operating philosophy is Live Positively... it's our expression of how we are making a positive difference in the lives of individuals and communities where we live, work and play... every day..

For the next few minutes, I want to talk about how Live Positively is coming to life through our brands to enhance well-being for our consumers and our communities... and how it's positively impacted our business.

So let's start with consumers. When we talk about enhancing well-being for consumers, it begins with Happiness. It's that moment of joy that only a Coca-Cola can bring. It's that special place Coca-Cola holds in the hearts and lives of people.

And when you think about it, Coca-Cola has always been there.

  • Coke is always there when families get together or old friends re-unite
  • Coke is there for thousands of boys and girls when they need financial support for their sports leagues
  • Coke is a scholarship waiting in high school seniors mailboxes
  • Coke is a smiling face, a helping hand, and a moment of uplift following a disaster... a natural disaster that affects many or a personal setback that affects one
  • Coke is always there waiting to help create unforgettable moments in theme parks, movie theaters, and sports stadiums everyday

No matter how people experience Coca-Cola, it always adds life, produces a smile and opens happiness... It's the Real Thing!

It's also the emotional effervescence we feel when we experience something truly amazing -- something only Coca-Cola can provide -- like this year creating a song with Jason Derulo or Maroon 5; getting a chance to play basketball with LeBron or Kobe; going backstage at the Academy Awards and American Idol, or "Moving to the Beat" as part of the 2012 Olympics;.

But well-being isn't just about yourself... it's about being a part of a transcendent cause and a collective pursuit.

That's one of the reasons why consumers invested of themselves -- emotionally and economically -- in raising more than two million dollars to protect the polar bear as part of our Arctic Home initiative this past winter.

It's why MyCokeRewards members donated millions of points and made it possible for nearly 4,000 schools to get balls and gym equipment through My Coke Rewards for Schools.

It's why so many of our 100,000 System employees across North America are engaged and are given time off to do it... the are active in their communities as volunteers, coaches, mentors, civic leaders, loyal friends and reliable neighbors.

When your brands are there at the most memorable moments of life, when they're part of experiences that inspire, and when they help people truly make a difference, then you have brands with the power to add a little happiness to a thirsty world... 1.8 billion times a day.

When we talk about Individual well-being, what's critical is empowerment... it's about providing people with choices that will help them create a healthy beverage diet that's right for them.

It's about respecting our consumers. That starts with providing a variety of products for every lifestyle and occasion.

Whether it's tailgating before the big game, a quiet family dinner, hydrating before a long run or refreshment for the kids after lacrosse practice... all of our products hydrate and can be part of an active, healthy lifestyle that includes a sensible, balanced diet and regular physical activity.

Today in the United States, we provide hundreds of beverage options, including Sparkling beverages, waters, juices, sports drinks and teas -- options to meet each consumer's needs.

To help consumers manage their calories, we offer 150 no- and low-calorie options. That includes everything from Diet Coke and "Zero" products to vitaminwater and our light juices.

We also offer more portion sizes than ever before, including many smaller ones. For example, we provide 7.5 oz. " mini" cans on brands like Coca-Cola, Diet Coke, Coke Zero, Sprite, Fanta Orange and Seagram's Ginger Ale. We also offer a 1.25L package for families that find 2 liters to be too much. And we recently introduced the new 12.5 oz. "handheld" package in convenience-retail outlets across the country.

We provide these options because we believe that there is a place in our consumers' lives for all of our brands. It all depends where you are in your day: Do you need energy? Are you cooling down after a workout? Are you celebrating something with friends?

It's a little like choosing what you'll wear in the morning. If all you have in your closet are shorts and t-shirts, that's good to wear on the treadmill, but probably not for the office or to go outside to play in the snow with your kids, or for church. You need variety -- different clothes for different occasions and activities.

We are providing this variety... in fact, we believe we're the only company in the U.S. that offers a zero-calorie option everywhere our lead-brand Coke is sold. And Pepsi and Dr Pepper are not very far behind. As an industry, we're leading the way in providing choices that help enhance consumers' well-being.

Our consumers are responding and making new choices. A majority of our growth is in smaller packages and our no- and low-calorie brands. Diet Coke is now the #2 beverage brand in the
U.S.... and Coke Zero has grown by double-digits since it was born five years ago.

As important as it is to offer product and package choices, it's equally important to provide opportunities for active living.

Why? Because a balanced approach to well-being focuses on both calories in and calories out. It's also what our consumers want.

In one of the largest studies on this topic ever -- the 2011 "Health Data Trends" study -- 71% of respondents indicated that staying active is one of the "most important aspects of maintaining health". And 31% indicated they have increased their exercise in the last six months... we want to see that move to 41%... to 51%...

That's why we invest so heavily in initiatives that promote physical activity. For example, Coca-Cola helped create a nationwide network of walking and biking trails, including right here in New York City, with Rails to Trails.

Another way we're encouraging individuals to get active is through the Sprite Spark Parks. Last year, we invested around $2 million to construct, refurbish and refresh more than 150 parks, athletic fields, and basketball courts.

Coca-Cola is also building gyms in schools. Last week, we announced that we will invest $5 million dollars- working with the National Foundation for Governors' Fitness Councils and American College of Sports Medicine -- a new partnership to put 100 new fitness centers in schools in communities across the country.

In addition, we support after-school programs like Triple Play, in partnership with the Boys & Girls Clubs of America. Triple play has provided nutritional education and physical activity opportunities to millions of young people across our nation.

Our commitment goes beyond just the physical activity programs we develop or support. Encouraging people to get active, and providing them opportunities to do so, is at the heart of our brand values.

Coming this summer, you'll see a clear example of the Coca-Cola commitment to health and well-being as part of our 2012 Olympic Games partnership.

This programming features our 8-pack of Olympians chosen to represent a diversity of sports as well as the multicultural makeup of American youth.

You can see one of them here... David Oliver, a world-class track and field star who is exhibiting the patriotism and energy of the Olympic movement and Coca-Cola.

Our "On the Go with DO" program leverages the popularity of David Oliver to encourage consumers to be active. Consumers can follow David on Twitter and Facebook. They can also win a community Field Day Experience with David by donating MyCokeRewards points. The program and message to "get on the go" will be in every store display. Donated points will be redeemed by schools for items such as jump ropes, basketballs, soccer balls, flag football game kits, and much more. You can also learn how David maintains his own healthy active balance through content on MyCokeRewards and other digital platforms.

"On the Go with DO" will be on customer Point-of-Sale in retail. Within the unique David Oliver story, we'll be able to communicate important messages about paying it forward for youth and the importance of physical activity.

David also stars as one of our 6 global athletes in our "Move to the Beat" initiative. Let's quickly look at the 15-second "collectible can" promo, a rough cut of the U.S. spot, and the 30-second global spot.

You can see how promoting physical activity is not an adjunct activity or a "sponsorship" -- it's at the center of our brand. This is applying our brand and marketing muscle to encourage people to get active.

By offering beverage and packaging choices, we're helping consumers manage their "calories in." Our commitment to physical activity is inspiring them to manage their "calories out." Put together, these choices are helping consumers manage their own well-being... on their own terms.

But you can't have a conversation about choice -- particularly about beverages -- without talking about the information and knowledge consumers need to make good decisions.

For many years, we've been at the forefront of labeling initiatives. We believe our labels should always be a powerful source of information -- something people look at every time they choose a product at the store.

  • Seven years ago, we led the way in changing nutrition labels on our single-serve packs to show nutrition information for the entire package.
  • Coca-Cola, joined by other leaders in the beverage industry, last year made front-of-pack calorie labeling a global commitment for all products. As part of that, we also supported First Lady Michelle Obama's Let's Move! Initiative.
  • In addition, we plan to provide calorie information for company-controlled vending machines and fountain equipment.

We're also working with The American Academy of Family Physicians to communicate the facts about the sweeteners we use in our products, so everyone can make informed decisions about the products they choose.

When you add it all up -- the uplift from meaningful brand interactions, the variety of beverage options and packages, the greater knowledge about our brands, and the investments and programs to support physical activity -- we are actively working everywhere to improve the people's well-being.

So that's Consumers... let's now talk about the well-being of the Communities we live in.

That starts with the environmental impact of our operations, something we take very seriously.

We're creating a more sustainable world, particularly in the areas of Energy Efficiency and Climate Protection, Water Stewardship, Sustainable Packaging.

Our energy efficiency commitment is to grow our business but not the carbon emissions from our manufacturing operations. To help achieve this commitment, we've rolled out of the largest heavy-duty hybrid electric delivery fleet in North America.

Our water stewardship goal is to safely return to nature and communities an amount of water equivalent to what we use in all of our beverages and their production. Part of that is wastewater treatment commitment, which is game-changing for our business and has helped us improve water efficiency for 8 straight years.

Our packaging vision is zero waste. It's supported by "Give It Back," our multi-million dollar effort to encourage consumers to recycle Coke bottles and cans... as well as our global rollout of PlantBottle and other advancements in renewable resources for our packaging.

We're making very solid progress against these commitments, but we still have a lot of work ahead of us to achieve our long-term sustainability commitments.

While we strive to be a strong environmental partner, we also want to be a good social partner in our communities. Last year, The Coca-Cola Company and The Coca-Cola Foundation gave nearly $50 million to communities across the U.S.

Of course, that includes millions of dollars to support to physical activity programs, like the programs I've just described.

Additionally, through our partnership with the National Park Foundation, Coca-Cola supports the restoration and renovation of our parks. This includes "America Is Your Park," which is going on right now and is designed to help keep America's parks beautiful so that families can get outside and play. People across America are voting now to help their favorite parks win renovation and restoration grants from Coca-Cola.

Through our Coca-Cola Scholars program, we provide college scholarships for thousands of students who otherwise might not be able to afford college.

And we're absolutely committed to enabling the economic empowerment of five million women entrepreneurs across the globe by 2020. Our 5X20 global initiative gives women opportunities to build their businesses, support their families, build their communities and inspire more to do the same.

Over the last several minutes, I've outlined Coca-Cola's commitment to enhancing the well-being of both our consumers and our communities.

The good news is this: What's good for our consumers and communities is also good for business.

  • In North America, our business has grown for eight consecutive quarters.
  • In 2011, we grew share across all beverage categories.
  • During the first quarter, Sparkling consumption occasions increased, purchase transactions were up, and total Sparkling volume grew.
  • Coke brand volume was also positive and saw increased brand health scores with both teens and moms.
  • Our Still business continues to lead category growth in North America for the fifth year in a row.
  • And MyCokeRewards continues to be the largest CPG loyalty program, reaching almost 20 million households.

As I close, I want to leave you with a quote from, Roberto Goizueta: "We, in business, have a calling. We have a calling to reward the confidence of those who have hired us and to build something lasting and good in the process."

As we partner with our consumers and communities to enhance well-being in all of its forms, we believe we are building something lasting and good.

We're committed to offering all consumers more choice -- not less -- and we're providing transparent information to help them make these choices as they take even more control of their own well-being. We're also providing opportunities for people to live more active, healthy lifestyles. That will never change.

But all of this is just a start. We WILL do more. As we do, we'll continue to "Win with Well-Being" with our consumers and communities.

Thank you.