Coca-Cola Sets Aggressive Brand and Trade Agenda for 2017
By John Karolefski
The Coca-Cola Company aims to satisfy consumers’ thirst for new beverages in 2017 by adding several new products to its world-class portfolio. At the same time, it plans to build on recent enhancements to its retailer relationships and supply chain efficiency.
Coke’s strategy of selling the right size packages at the right prices will enable the beverage giant to evolve a segmented approach of pricing. It can put the correct portfolio of brands and packages in the right place to serve a wider variety of occasions with a consistent and disciplined approach to price increases, according to Sandy Douglas, EVP and President, Coca-Cola North America.
“We’ve evolved the business to operate in a rapidly changing external landscape and at the same time adapt in a very intimate way to the changing consumer preferences that are rapidly changing the marketplace,” Douglas said in a presentation recently to security analysts at the Morgan Stanley Consumer Conference.
He said the company has implemented a new product supply group to provide governance to ensure quality and efficiency and speed and agility in manufacturing. In addition, Coke is installing a new customer management model that aims to drive decision making and rapid partnership with retail customers (Note: Later requests by CPGmatters for more details were declined).
Douglas boasted that the company’s customer service and satisfaction scores were the highest they have been in years. As evidence, he pointed to two key industry surveys. In the U.S. Advantage Report, trading partners ranked Coca-Cola as number one out of 19 companies. In this year’s Kantar Survey, Coke was ranked number two by top U.S. retailers.
“I don’t have to tell you that PepsiCo was number one,” he said, “so we’re in for the battle of customer satisfaction as well as the battle of beverages and snacks. and we’re in good company in this leadership growth category where we compete.”
Coca-Cola’s will introduce its Gold Peak line of premium ready-to-drink (RTD) tea lattes and coffees in the first quarter of 2017. The company recently signed a deal to produce, distribute and market a line of Dunkin Donuts branded ice coffee beverages, which will be sold in grocery stores, convenient stores and in Dunkin Donuts’ restaurants. It is also tapping into new fast growing categories such as value-added dairy with cold-pressed juices and Fairlife, an ultra-filtered milk containing 30% more calcium than ordinary milk.
Douglas was enthusiastic about two water brands, Glacéau Smartwater Sparkling and Dasani Sparkling, and predicted sales growth for many years to come.
“I think the consumer wants to have just what they want, whether it’s with sugar products or zero- calorie products or somewhere in between,” Douglas said. “The ability to execute proprietary special packaging to the perfect location in the market has a lot of runway for growth going forward and continues to grow nearly at double-digit rates in our portfolio.”
The Financial Times recently reported that as of Dec. 13, 2016, the consensus forecast among 24 polled investment analysts covering Coca-Cola advises that the company will outperform the market.
There will be a change in senior leadership next year. Company veteran James Quincey, President and Chief Operating Officer, will succeed Chief Executive Officer Muhtar Kent as CEO, effective May 1, 2017. Kent will continue as Chairman of the Board of Directors.
Editor’s Note: This article was based in part on a transcript from Seeking Alpha. For more information, visit www.SeekingAlpha.com.