ATLANTA – “This beautiful piece of paper you own is worth over 110 percent more to you today than it was 10 years ago,”
The company’s Annual Meeting of Shareowners at the World of
“It’s about making sure we are not only a better and more valuable company today than we were 10 years ago,” he said. “More importantly, it’s about doing everything possible today to create greater value for you and all of our stakeholders a decade from now… and even two, three and four decades from now.
“We don’t manage this business only for the next quarter. We manage it also for the next quarter of a century.”
Kent, who was presiding over his 10th annual shareowners meeting, said the company is making progress against its strategic plan to reinvigorate growth and meet its long-term revenue and profit targets.
“In short, we’ve been working this plan hard… and the plan is working,” he said. “Our company, your company, is becoming stronger, more efficient and more focused on our core strengths of marketing, brand-building, customer value creation, and leading our great franchise bottling system.”
Over the last decade,
During that time, Kent noted, the company has increased shareholder value by $138 billion and returned $63 billion through dividends and share buybacks.
President and Chief Operating Officer James Quincey said the company and its 250 bottling partners worldwide have invested more than $75 billion combined in the business over the last six years. He also reported on the company’s efforts to refranchise its owned bottling operations. When this process is complete by the end of 2017, company-owned bottling operations will only account for 3 percent of Coke’s global volume (compared to 26 percent in 2014 and 18 percent today).
“All of this will make our company a much leaner, higher-margin, higher-return consumer- focused business,” Quincey said. “And most importantly, these actions pave the way for us to achieve the long-term growth targets for your investments.”
Looking ahead, Quincey expressed confidence in both Coke’s growth strategy and shareowners’ long-term investment.
“We see a world where the average household consumes roughly 26 drinks a day – whether it be water, coffee, tea, juice, etc. But less than two of those drinks are from our portfolio,” he said. “So there is simply a huge opportunity as middle-class growth and consumer demand expands worldwide for us to grow our business.”
During the business portion of the meeting, shareowners supported the election of all directors and other management proposals. Executives also fielded a range of questions on everything from human rights to a new sparkling juice brand in Africa to including coupons in future proxy statements. Here are edited excerpts from the Q&A:
On proposed sugar taxes around the world:
Kent: “We know these kind of taxes – regressive taxation – don’t work. What works are combined efforts of our industry and the Golden Triangle – government, business and civil society –coming together to innovate and collaborate to reduce the number of calories through small packaging sizes like the ones we introduced in the U.S. in 2010 – the 7.5 ounce can, 8-ounce bottle and 8.5-ounce aluminum bottle – that are all growing double-digits and helping to reduce calories. (These types of actions) all helped take 6.4 trillion calories out of the U.S. diet through a collaborative movement we had with the Robert Wood Johnson Foundation and others in the nonalcoholic beverage industry in the U.S. And we’ve made a further commitment to reduce calories by another 20 percent through innovation, collaboration in that same partnership by 2025. The answer is not regressive taxes; the answer is collaborative innovation. That’s how we see it.”
On the company’s commitment to human rights:
Kent: “We are one of the companies in the world that has the most progressive policies related to human rights and child labor… not just for our own company and bottlers, but also for our suppliers. We take that very seriously and, as a result of our policies, we feel we’re making an impact down our supply chain. We cannot be the only entity to solve huge societal issues, but we can be a leader. We can show the way for others to follow like we do in may areas. We demand from all our suppliers, as our bottlers do, that they comply with all our policies. And not just our agricultural suppliers… but our entire supply chain.”
One initial reaction to Coke’s new ‘Taste the Feeling’ advertising
Quincey: “It’s not just just a campaign. It’s about a whole integration and creating the one-brand idea for Coke… lifting up the red disc and the beautiful iconography and the functionality of Coke for all the variants… and integrating with a visual identity system.”
Kent: “It’s a little early. I talked about “more and better marketing.” The “better marketing” is certainly coming with the “Taste the Feeling” campaign. But it’s different. For the first time in my almost 40 years in the