BOSTON – During a presentation to analysts and investors at
the Barclays Capital Back-to-School Consumer Conference, Coca-Cola
International President Ahmet Bozer described the realities of global markets
and why The Coca-Cola Company is positioned to grow within them.
Bozer opened with an overview of Coca-Cola International, which serves a large and dynamic base of almost 6 billion consumers, many of whom are under the age of 21. Emerging and developing markets account for more than 60 percent of Coke’s business, Bozer added.
He outlined the operating structure for Coca-Cola International established earlier this year. “The main purpose of the establishment of Coca-Cola International,” he said, “was that we were able to accelerate our decision-making process and execute and scale better across the three groups (Europe, Pacific and Eurasia & Africa). That has been working quite well so far for us.”
Bozer provided a few highlights for each Coca-Cola International operating group:
Europe: Recovery Looming
Europe is positioned to capture profitable growth despite near-term economic headwinds, Bozer said. He described the market as the “largest NARTD (nonalcoholic ready-to-drink) retail value pool in the world” that's expected to grow between now and 2020. He highlighted Europe's low per capita consumption rates for sparkling beverages compared to other Western markets – suggesting room for growth.
As for headwinds, Bozer said Europe's economic recovery is inevitable, noting recent signs that austerity programs are yielding positive results in countries like Greece. Once the region’s economic conditions improve, the company is well-positioned to see new growth.
“We will benefit from the fact that we have taken advantage of this period to get ourselves in a better position with some of the emerging channels in Europe such as discounters,” he said. “At the same time, we have been broadening our consumer base, appealing to not just teenagers and young adults but also adult consumers. And we have been selectively expanding our portfolio beyond sparkling.”
Pacific: Strategy Reflects Diversity
Bozer provided an overview of Coke’s Pacific Group, which includes developed markets like Japan and Australia, as well as high-potential emerging markets that make up about 75 percent of the region’s volume.
“Our strategy in addressing the Pacific Group is reflecting that diversity in our marketplace,” he said. “In emerging markets, it is very important that we build frequency with teenagers and young adults in sparkling beverages. In developed markets, while that still is an important strategic initiative for us, the emphasis must be on more innovation so we can also appeal to the growing adult population.”
Bozer focused on China, whose economy has slowed a bit recently. “The opportunity we see in China is still huge in the sense that there will be a significant increase in personal consumption expenditure and, therefore, disposable income. There will be more middle-class consumers between now and 2020... more urbanization is expected to take place. I would add to that, still the NARTD per capita in the market is at a very, very early phase of development, which gives us opportunity to grow.”
A collection of markets in Southeast Asia, including the Philippines, Vietnam, Indonesia, Thailand, Myanmar, Malaysia and Singapore, is home to more than 600 million people combined. “Between now and 2020, there is still significant growth expected in these markets,” Bozer added. "We have a pretty strong position in sound markets with sparkling beverages, juice and juice drinks and waters and other regional brands.”
Eurasia & Africa: Opportunities Abound
Bozer turned to Eurasia & Africa, noting that the region has delivered 9 percent volume growth since the launch of the company's 2020 Vision and continues to present opportunities. He noted this geography holds 66 percent of the world's oil reserves. This region has “extremely favorable demographic trends with emerging middle class and urbanization, but at the same time, very, very low current per capita consumption… (which) points to a significant opportunity both in the short and the long term,” he said.
He highlighted Coke's acquisition of Rani, the No. 1 juice brand in the Middle East, and singled out Russia, where brand Coca-Cola is growing at a double-digit rate and has its highest market share in history.
Africa, too, has enormous potential, Bozer said, noting that seven of the 10 fastest-growing economies are in Africa.
Bozer concluded by noting that Coca-Cola International is comprised of “an incredibly rich portfolio of countries… 159 of them.” Every developing nation “offers huge opportunities driven by favorable demographic developments as well as low per capita consumption,” he added.
The company is optimistic due to its strong presence in different categories and a solidly aligned
system of bottling partners.
“We have a lot of continuity, and our organization is evolving very well – all unified with our bottling system, and behind a clear vision and a clear set of strategies to realize those opportunities," Bozer concluded. "We are confidently marching on that road to create a bright future for all of us.”
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