MY FELLOW SHAREOWNERS:
Our Journey Forward accelerated in 2015, as we continued to collaborate closely with many partners to reinvigorate growth, increase profitability and deliver greater long‑term, sustainable value to our system and shareowners like you.
In short, we accomplished what we set out to do in 2015. And I give tremendous credit to my Coca‑Cola colleagues around the world. This Annual Review shares their stories, as well as the stories behind the strong partnerships that bring our business to life in more than 200 countries every day:
• Partnerships with consumers, who turn to us for simple moments of refreshment, uplift and togetherness more than 1.9 billion times a day.
• Partnerships across our worldwide bottling system, which makes our beverages and ensures they’re in stores and restaurants and ready for purchase.
• Partnerships with our valued customers—all the shops, eateries, theaters, theme parks and other outlets that sell our beverages.
• And partnerships with other vital stakeholders, from shareowners like you to all those we work with across the “golden triangle” of business, government and civil society.
Last year, we reshaped our business for greater value creation by focusing on the five key actions we outlined in late 2014.
• First, we said we would establish clear portfolio roles for our various markets around the world to drive revenue and profit growth. And we did. Working with our bottling and customer partners, we gained global value share and increased organic revenue 4 percent.1
In emerging markets, we focused on volume and building a foundation for long‑term success. In developing markets, we used a balance of volume and pricing. In developed markets, we emphasized price/mix and smaller packages. And we added a revenue metric to our incentive pay plans.
• Second, we made disciplined investments in our brands and other growth opportunities. Together with our global marketing and advertising partners, we invested in more and better marketing, including a double‑digit increase in spending on media advertising, and we developed a new global marketing campaign for Trademark Coca‑Cola. (More on this later.)
We closed on our strategic partnership with Monster Beverage Corporation, strengthening our position in the fast‑growing energy category.
We invested in promising brands like Suja,2 a line of premium organic, cold‑pressed juices. We agreed to acquire a brand of plant‑based protein drinks, China Green Culiangwang. And we expanded to nationwide the U.S. distribution of fairlife3 ultra‑filtered milk in tandem with our partners at Select Milk Producers.
• Third, we became more efficient and productive, reducing costs and reinvesting the savings. We implemented “zero‑based work” to help our people look closely at every resource decision. We reduced non‑media marketing spending. And we realized new supply chain efficiencies.
• Fourth, we streamlined and simplified our Company by standardizing key processes, removing a layer of functional management and connecting our regional business units directly to headquarters.
• Fifth, we took steps to refocus on our core business model of building the world’s most‑loved beverage brands and leading an unmatched global system of bottling partners.
In North America, we accelerated the sale of Company‑owned bottling territories to our franchise bottling partners. In early 2016, we said we would completely refranchise our North American system by year‑end 2017.
We also announced plans to form a unified new bottling partner in Western Europe. We took steps to improve our bottling system in Southern and East Africa and Indonesia. And, in early 2016, we unveiled plans to sell our Company‑owned bottling operations in China to two existing bottling partners.
With our partners, my Coca‑Cola colleagues did a lot of other outstanding work in 2015:
“Taste the Feeling” and “One Brand.” Our marketing teams and agency partners created “Taste the Feeling”—a new global marketing campaign for Trademark Coca‑Cola, including Coke, Diet Coke, Coke Zero and Coca‑Cola Life. Launched in early 2016, the campaign is part of a “one brand” strategy to link all Coca‑Cola variants more closely together.
With “Taste the Feeling,” we’re reminding people of the unmatched taste, uplift, refreshment and togetherness that come with enjoying Coca‑Cola. And we’re saying we have a Coke for everyone—with calories, fewer calories or no calories, with or without caffeine, and so on. The choice belongs to each consumer.
Coke Bottle 100. Our iconic Coca‑Cola bottle turned 100 years young in 2015, and we created new value for customers and consumers with packaging, advertising and art exhibits celebrating this unmistakable symbol of refreshment.
Innovation. We introduced new brands and packages to fit evolving consumer tastes. For example, we tripled to 27 the number of markets for Coca‑Cola Life. We rolled out exciting new iterations of “Share a Coke” in many markets. And we tested a new PlantBottle package that’s 100 percent made from plant material.
Sustainability. We advanced our sustainability partnerships across our three focus areas of women, water and well‑being. I saw this firsthand this past year when I congratulated a group of women entrepreneurs graduating from a retail leadership program created with a government agency in the Philippines.
We also announced that we expect to meet our goal of 100 percent water replenishment five years ahead of schedule. And we began to improve the way we build well‑being with a renewed commitment to being part of the solution to obesity.
I’m proud of all that our people and partners did to create incremental value last year. We did what we said we would do, and we successfully reshaped our business for more robust and sustainable growth.
Based on last year’s success, we’re now further accelerating the pace of change as we become a company focused squarely on building brands, creating value and leading a worldwide system of bottling partners.
Thank you for your interest and your investment in The Coca‑Cola Company. These are exciting days, and we’re honored to have you with us as we continue Our Journey Forward!
Chairman of the Board of Directors
and Chief Executive Officer
April 1, 2016
1 See page 33 of the 2015 Annual Review for a reconciliation of non-GAAP financial measures to our results as reported under accounting principles generally accepted in the United States
2 Suja is a trademark of Suja Life, LLC.
3 fairlife is a trademark of Fairlife, LLC.