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Coca Cola

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by

Luz Lambertus

on 8 July 2014

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Transcript of Coca Cola

Why are you here?
You have noticed drastic changes in your industry
The Big Picture: The Soft Drink Industry
How did we get here?
Where are we now?
The industry is changing
Let's dive into specifics
Who are your competitors?
How's Coca-Cola Doing?
Thank you For Listening.
Any Questions?
The Road to Success
How to Take Coca-Cola Into the Future
Success 50 miles
What should you listen for?
Key internal & external factors affecting your industry
Industry status quo
How you stack up against the competition
How you can use this data to improve your future outlook

Carbonated soft drinks remain the industry leader amongst other beverages
The Health Conscious Consumer
Why is health an issue?
Unexpected Competition
Competitor Invasion
Imported soda projected to grow an annualized rate of 7.8% to $1.5billion in 2019
The Government Says What?
Public officials rallying for increasing soda regulation
Large cities passing policies limiting soda sales
I.e. New York City, San Francisco
Packaging standards and restrictions
Sales taxes
The Health Conscious Consumer
Consumers reach for healthier alternatives
Losing your customers
Era of soda coming to an end?
Struggling to maintain profits
No More Sweet Profits!
No job? No money? NO SODA!
Soft drink consumption dropped an average of 3.3% annually over 2007, 2008 and 2009

2010-1013 consumption decline slowed back down to less than 2.0% annually
Big Fish in a Small Pond
Top 3 Companies = 59.1% Market Share
The Tale of Three Cities
Who's leading the pack?
What do the numbers say?
Who's next in line?
What do the numbers say?
Biggest Threat?
What do the numbers say?
What are the leading top brands?
17%
9.4%
8.9%
6.8%
6.5%
What Determines Demand?
The Price Sensitive Consumer
Consumers generally opt for cheaper soda

Disposable income

Brand loyalty

Fattening Drinks
Demand lowered by health and nutrition concerns
Alternatives:
Smaller portion
Zero calorie “Coca-Cola ZERO” “Pepsi Max”
1 calorie “PEPSI ONE”
10 calorie “Dr Pepper TEN”
Diet “Diet Pepsi” “Diet Coke”
Product Promotion
Soda producers market heavily due to high competition and to retain customer loyalty
Celebrity endorsements
World/Sporting Events
Who should you be worried about?
“We think the possibility of ABI buying the beverage businesses and possibly all of PepsiCo still remains.”
Coca-Cola, meet your consumers!
Diverse Consumers
Soda: The Choice of the Young & Frugal
What do the consumers want?
The Thin Line Between Soda and Water
Where do your customers purchase your product?
Let's Break Down the Myths
No Government Intervention
Sugar-free
Splenda and Stevia Options
Low sugar
Caffeine Free
No artificial ingredients
Water consumption has been inversely correlated to soda consumption in the same period.
Data Source: Gallup via Statista
Consumers are making healthier choices when shopping
A Deeper Look
Revenue vs. Income
Buying vs. Owing
Falling Short of Expectations
Margins
Coca-Cola’s Continued Buyout of Bottling Companies

23% increase in Assets in 4 years
While the Debt Soars

36% increase in Long and Short Term Debt in 4 years
65% stock appreciation in 5 years for Coca-Cola
110% S&P Average
170% for Dr. Pepper Snapple Group
Coke IS Selling!
BUT...
Sales Growth is Negative
No more 5 Cent Bottles
For 70 years leading to the 1950’s Coke was priced at a constant 5 cent per bottle

7.1% compounded yearly increase from 2002
127% increase of 2 Liter Coke in 19 years

56% Increase in Consumer Price Index in 19 years
Trying to Retain & Recruit Customers
How's the Money Being Spent?
Who's Being Advertised to?
The Playing Field is Changing
$492 million spent on child and teen advertising
24% school vending machine advertising
19.5% decrease in youth directed television advertising

50% increase in Online and Viral Marketing
Coke Cheers - Mobile Application
These Are Some Good Signs
CokeRecycling.com – Infomercial on Disposing Coke Products
Let's Re-Cap!
Looking Towards the Future
Changes in Health & Lifestyle
Government Impositions
Costs will Skyrocket
What Will Consumers Buy?
A Different Way of Looking At Things
Going Green-Mania!
95% of all plastics end up in a landfill
Oxo Bio degradation – Corn Based Plastics
Dasani bottles made of 30% plant based material
Microbial Stimulation- ENSO Additive
Adding nutrients and organic compounds to plastics
Stimulates Bio degradation in Landfills
Same Look and Feel
Recommendations
If it's broken, fix it!
Cut your losses from brands that do not generate revenue
The industry's average profit:
2009
2014
Profit margins are down
Say "hello" to the newest member of the Coca-Cola family
Bubble Remix!
25% All Natural Fruit Juice
Go
Green
& Tell!
Lastly...
75% Seltzer
100% Fun
Full transcript