Coca-Cola is “moving at the speed of the consumer” in its flagship market by evolving both its business model and how it measures success, the company’s top North America executive said Monday at a conference hosted by trade publication Beverage Digest.

“What we are in today is a very dynamic and strong growth industry – an industry that’s being led, defined and multiplied by the consumer,” Sandy Douglas told an audience of industry peers. “At Coca-Cola, our success always has been driven by our ability to give people the beverages they want and love. And as people’s lifestyles change, we’re building a truly consumer-centric total beverage portfolio to meet those needs.”

Sandy Douglas, president of Coca-Cola North America, spoke at the Beverage Digest Market Smarts conference.
Sandy Douglas, president of Coca-Cola North America, speaks at the Beverage Digest Market Smarts conference in New York on June 12, 2017.

Central to Coca-Cola North America’s reshaped growth model is a shifting focus from unit-case volume (gallons) to value (dollars) through smaller, more convenient packaging options like 7.5-oz. mini cans and 8-oz. bottles, and an expanded array of low- and no-calorie offerings.

“People are telling us they want smaller packages,” Douglas said. “They want just the amount of the beverages they want. And they’ve demonstrated over and over again that they’re willing to pay for them.”

While Coke’s sparkling volume in the U.S. has declined in recent years, total transactions – how many times people buy the company’s beverages – are on the rise. And, as a result, brand health and household penetration stats are trending upward, too.

The Coca-Cola Company expanded their portfolio to offer more sparkling options such as Coca-Cola, Coke Zero, Coke Life, Sprite, Cherry Coke, and Seagram's ginger ale!

“We’re evolving our sparkling portfolio to meet the needs and preferences of the consumer – emphasizing choice, moderation and innovation,” Douglas said. “We’re diversifying our portfolio more rapidly – whether its new packaging, new flavors or variants in established categories, or expanding into entirely new categories.”

And these shifts in the consumer landscape have inspired Coke to rethink its core success metrics. “We will measure ourselves on what people are willing to pay for our products, not the gallons they purchase,” he said, adding, “If you follow your consumer, you’re likely to have a good day.”

Douglas said the company sees concerns over added sugar as “an opportunity, not a threat” and is taking steps to both reduce the sugar content of its existing drinks and introduce new low- and no-sugar options, and providing clear and transparent nutrition information on packaging and at the point of sale to help people make informed choices.

“All of this work enables us to profitably grow while responding to consumer needs,” Douglas said. “We believe we can grow sustainably while enabling people to control added sugar intake.”

See how The Coca-Cola Company reduced their beverage calories by reducing sugar.

Since 2001, the nonalcoholic, ready-to-drink (NARTD) beverage industry has reduced sparkling beverages calories from sugar, per person, per day by 23 percent. “That’s consumer-driven change,” Douglas said. “That’s sustainable change driven by the consumer’s desire to buy what they want.”

Coca-Cola is boosting its still beverage portfolio, Douglas said, through acquisition (glaceau vitaminwater and smartwater) and internal innovation and brand-building (Gold Peak tea and Simply juice). Investments and partnerships led by the company’s Venturing & Emerging Brands unit (VEB) have given Coke a leg up in emerging categories like value-added dairy (fairlife), organic juices and smoothies (Suja) and organic teas (Honest), and a new ready-to-drink coffee collaboration with Dunkin’ Donuts is showing promise, he added.

Ongoing efforts to refranchise owned bottling territories in the U.S. – which will be completed by the end of 2017 – are creating an aligned network of bottlers capable of executing Coke’s new multi-category approach in the market.

'We’ve been on a journey to a changing marketplace and to get our business ready for the future. And based on sales data, we’re doing pretty well. But our accomplishments made, to date, are dwarfed by the size of the opportunity we see ahead.'

“The Coke system is made up of a dynamic group of people who are very close to their communities, intimate with their customers and have a unique ability to take advantage of the opportunities we see ahead,” Douglas said. “That local touch is a key part of our segmented market strategy.”

Supporting local communities is part of the DNA of Coke’s U.S. bottling network, Douglas said, citing programs focused on water replenishment, economic empowerment and more. “Today’s consumers expect more from us as a global enterprise and a local enterprise. They expect us to grow the value of their investment but also to use our scale to make a positive difference on issues that matter to them.”

Douglas expressed optimism not only in the future of Coke’s business, but for the industry as a whole. The NARTD beverage category is “outpunching its weight in absolute retail dollar growth” in Nielsen-measured channels, he said.

“This is truly a great business,” Douglas concluded. “We are operating together at a time of dynamic change. We’ve been on a journey to a changing marketplace and to get our business ready for the future. And based on sales data, we’re doing pretty well. But our accomplishments made, to date, are dwarfed by the size of the opportunity we see ahead.”