Bottles of Coca-Cola's portfolio of products

Coca‑Cola Leaders Update Investors on 2020 Results and 2021 Forecast


The Coca‑Cola Company navigated a host of challenges presented by the COVID-19 pandemic with resiliency, adapting its business to build a foundation for future growth, Chairman and CEO James Quincey told analysts and investors while reviewing the company’s fourth quarter and full-year 2020 results.

“While the virus is still a factor in the near term, we are well on our way to emerging stronger and returning to the path of delivering at the high end of our long-term growth model,” Quincey said. 

After slight improvements in October and November, a resurgence of the virus led to renewed restrictions in many markets. As a result, the company’s volume slowed in December. Results in the fourth quarter were mixed, based on varying degrees of lockdowns in different markets. Positive momentum in China, Brazil, Japan, India, West Africa and Turkey, for example, was offset by sharper declines in Western Europe and other markets facing more restrictions.

Trademark Coke delivered 1% volume growth in the fourth quarter, driven by Coca‑Cola Zero Sugar, which was up 3% for the quarter and 4% for the year. Other highlights included strong performance for Topo Chico and AHA sparkling waters in North America.

The company is also poised to emerge from the pandemic stronger in both on- and off-premise channels, in part due to ongoing efforts with bottling partners to support retail and foodservice customers and ensure seamless supply chain execution.

The pandemic expedited the shift to a digitized enterprise and accelerated ecommerce priorities like the myCoke B2B ordering platform, partnerships with food aggregators to boost beverage visibility and availability, and the Wabi ecosystem of digital apps connecting Coca‑Cola and other consumer products companies with store owners and consumers.

‘Asynchronous Recovery’

Vaccine availability and the pace of consumers returning to social, work and travel routines will continue to impact the company’s business in 2021 on a country-by-country basis.

“It’s clear that the pace and availability of vaccines will look different around the world, and therefore we will likely see some level of asynchronous recovery, depending on both vaccine distribution and other macroeconomic factors,” Quincey said. 

A new, networked organizational structure comprised of nine operating units and five global category teams, supported by a Platform Services organization and center functions, will drive clearer decision-making and empower the company to focus on innovation and growth for its portfolio of 200 master brands.

“The focus and flexibility of the networked model will drive the entire Coke system for years to come,” Quincey said.

On the marketing front, a focus on targeted, experiential campaigns that are “data-driven, occasion-based and always-on” will deliver stronger returns. Initial outputs of this model will include the upcoming launches of global campaigns for Sprite and Fanta.

Refreshing the World, Making a Difference

Quincey noted the company’s COVID-19 relief efforts and progress against sustainability priorities. These included:

- Launching a global social justice framework to promote racial equity;

- Setting a new World Without Waste target to reduce use of virgin PET in packaging;

- Progress toward a 2030 science-based carbon target – 25% reduction of greenhouse gas emissions from a 2015 baseline – which is also a critical milestone to achieving the company’s net zero carbon ambition by 2050;

- And reaching the 5by20 goal to empower 5 million women by 2020, creating shared value for female entrepreneurs, their families and communities.

“We remain grounded by our purpose,” Quincey said. “And our ESG [environment, sustainability, governance] work is embedded in our business and the value we create.”

Looking ahead, the company remains focused on its consumer-centric Beverages For Life strategy and is equipped to deliver long-term, sustainable growth. “The objectives and priorities we set for ourselves during the peak of the crisis have galvanized our company and are driving our ability to continue to execute through volatile, near-term dynamics,” Quincey said.

Company to Appeal U.S. Tax Court Ruling

Quincey and Chief Financial Officer John Murphy also addressed the company’s dispute with the U.S. Internal Revenue Service. The company believes it will ultimately prevail in the case.

“While there is uncertainty associated with the timing and ultimate resolution, we will continue to prioritize investing in the business to drive long-term growth, as well as supporting dividend growth for our shareowners,” Murphy said. “We are confident we have ample flexibility between our cash generation and balance sheet to manage the range of outcomes. … Our intention is to be as transparent as possible throughout the process.”

More details on the company’s position and next steps can be found in the Form 8K filed this morning.

Forward-Looking Statements

This press release may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause The Coca‑Cola Company’s actual results to differ materially from its historical experience and our present expectations or projections. These risks include, but are not limited to, the negative impacts of the COVID-19 pandemic on our business; obesity and other health-related concerns; evolving consumer product and shopping preferences; increased competition; water scarcity and poor quality; increased demand for food products and decreased agricultural productivity; product safety and quality concerns; perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage products or packaging materials; an inability to be successful in our innovation activities; an inability to realize the economic benefits for our reorganization and related reduction in workforce; an inability to protect our information systems against service interruption, misappropriation of data or breaches of security; failure to comply with personal data protection and privacy laws; failure to digitize the Coca‑Cola system; changes in the retail landscape or the loss of key retail or foodservice customers; an inability to expand operations in emerging and developing markets; fluctuations in foreign currency exchange rates; interest rate increases; an inability to maintain good relationships with our bottling partners; a deterioration in our bottling partners’ financial condition; increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters, including the outcome of our ongoing tax dispute or any related disputes with the U.S. Internal Revenue Service; increased or new indirect taxes in the United States and throughout the world; an inability to successfully manage the possible negative consequences of our productivity initiatives; an inability to attract or retain a highly skilled and diverse workforce; increased cost, disruption of supply or shortage of energy or fuel; increased cost, disruption of supply or shortage of ingredients, other raw materials, packaging materials, aluminum cans and other containers; increasing concerns about the environmental impact of plastic bottles and other plastic packaging materials; changes in laws and regulations relating to beverage containers and packaging; significant additional labeling or warning requirements or limitations on the marketing or sale of our products; unfavorable general economic conditions in the United States; unfavorable economic and political conditions in international markets; unfavorable outcome of litigation or legal proceedings; conducting business in markets with high-risk legal compliance environments; failure by our third-party service providers and business partners to satisfactorily fulfill their commitments and responsibilities; failure to adequately protect, or disputes relating to, trademarks, formulae and other intellectual property rights; adverse weather conditions; climate change and legal or regulatory responses thereto; damage to our brand image, corporate reputation and social license to operate from negative publicity, whether or not warranted, concerning product safety or quality, workplace and human rights, obesity or other issues; changes in, or failure to comply with, the laws and regulations applicable to our products or our business operations; changes in accounting standards; an inability to achieve our overall long-term growth objectives; deterioration of global credit market conditions; default by or failure of one or more of our counterparty financial institutions; an inability to renew collective bargaining agreements on satisfactory terms, or we or our bottling partners experience strikes, work stoppages or labor unrest; future impairment charges; multi-employer pension plan withdrawal liabilities in the future; an inability to successfully integrate and manage our company-owned or -controlled bottling operations or other acquired businesses or brands; an inability to successfully manage our refranchising activities; failure to realize a significant portion of the anticipated benefits of our strategic relationship with Monster Beverage Corporation; global or regional catastrophic events; and other risks discussed in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2019 and our subsequently filed Quarterly Reports on Form 10-Q and other reports, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements.