Coca-Cola CEO: ‘We Continue to Focus on Winning as the World Reopens’

While Coca-Cola continues to face challenges in markets bearing the economic brunt of coronavirus lockdowns – especially in those where most of its business comes from restaurants and other away-from-home channels hit hardest by the pandemic – Chairman and CEO James Quincey is encouraged by the company’s progress in the third quarter and remains confident in its plans to emerge stronger.

“Together with our bottlers, we continue to focus on winning as the world reopens,” Quincey said Oct. 22 during a call with analysts.

Global volume trends continue to improve, from a 25% decline in April to low-single digit drops since September. Away-from-home outlets, which represent roughly half of Coke’s business globally, are showing signs of stabilization. Grocery, convenience retail and e-commerce sales were up in the quarter, thanks to the Coca-Cola system’s efforts to prioritize fast-moving SKUs and pivot supply chains based on shifts in shopper behavior.

In North America, for example, e-commerce sales have more than doubled year to date, and the company is partnering with restaurants and aggregators to boost drink sales via mobile apps and online ordering platforms.

Trademark Coke volume increased in the third quarter and posted share gains in 80% of the company’s top markets globally. Local brands like Simply and fairlife in the U.S. and Thums Up in India also delivered growth in the quarter.

A Catalyst for Change

While COVID-19 has served as a “catalyst for change,” Quincey said the seeds for the company’s strategic transformation were planted well before the crisis hit.

“We’ve been challenging legacy ways of doing business,” he said, “and the pandemic helped us realize we could be bolder in our efforts.”

A new, networked operating model better positions the Coca-Cola system to pursue its Beverages for Life strategy and accelerate plans to streamline its global beverage portfolio, which is being pared down from 400-plus master brands to approximately 200 with the greatest potential for growth and scale.

A more disciplined approach to innovation and marketing efficiency and effectiveness will fuel reinvestment into these priority brands, Quincey noted, and a stepped-up focus on revenue growth management and commercial execution will ensure more consumer-preferred beverages are offered at the right prices in the right channels for the right occasions.

“We’re focusing on bigger, more scalable bets,” Quincey said, adding that innovation will manifest via trademark extensions like Coke Energy, new brands like AHA flavored sparkling water and category-crossing breakthroughs like Topo Chico Hard Seltzer. “We will continue to experiment on a local level, and our new approach allows us to move faster to find and scale our best initiatives. We have a robust pipeline in the works for next year and expect innovation to continue to contribute meaningfully to our growth going forward.”

Recovery will not be a “straight line” around the world, Quincey cautioned, as impacts vary by country based on the degree of lockdown restrictions. The company continues to navigate through uncertainties of the pandemic, he said, and is prepared for setbacks potentially triggered by colder weather in the Northern Hemisphere and other factors.

“It’s important to remember that the world is in a fragile state,” Quincey said. “We are heading toward a phase where the world is adapting to a new way of life with COVID. The progress we’ve made on accelerating our strategic transformation will give us the focus and flexibility to manage our business and execute with excellence today, and to set ourselves up for better results in the long term.”