It takes a number of things working together for a food and beverage company to flourish, but in the case of Atlanta-based Coca-Cola Co., three key elements stand out in the overall portfolio equation, said John Murphy, executive vice-president and chief financial officer.
First, the company must continue to invest and leverage the innovation that it is developing in its global network around the world.
“We have innovation centers based in Shanghai, in Tokyo, in Brussels and in the United States, in Apopka in Florida,” Mr. Murphy told analysts during a June 12 presentation at the Deutsche Bank dbAccess Global Consumer Conference in Paris. “And the particular focus on the Beverages for Life, on tailoring formulations and ingredients to consumer needs, offering more personalized solutions through packaging, through product solutions and implementing an approach to revenue growth management around the world that we know works.”
Mr. Murphy said Coca-Cola has experienced a steady output of innovation, including the debut of Coke Plus in Japan and the recent roll-out of Coke Energy.
The second element is Coca-Cola’s size. Mr. Murphy said the beverage giant’s presence in more than 200 countries is “a major advantage,” and effectively gives the company “laboratories” in the countries in which it has operations.
“A huge opportunity that we have going forward is to be able to do a better job of leveraging the experimentation that’s underway in many parts of the world and being able to lift, shift and scale the things that are working well and to enjoy the benefits of that in a scaled fashion,” he said.
As an example, he pointed to the conversion of the company’s tea business to Fuze in Europe last year. Now, Coca-Cola is the market leader in 11 European markets, he said. He also pointed to smartwarter, which has been rolled out in more than 32 markets and is “playing at a premium position and with lots of runway ahead.”
A third element key to the overall portfolio equation is Coca-Cola’s approach to being suitably opportunistic on the M.&A. front.
“Over the last three to four years, we’ve had some significant additions to the portfolio,” he said. “… That all of course needs to be underpinned by a continuous elevation in our marketing capabilities to stay ahead of and to anticipate consumer needs and trends.”
Mr. Murphy used Coca-Cola’s acquisition of Costa as an example of the M.&A. element at work. Since the acquisition was finalized in January, he said Coca-Cola has been moving with speed to accelerate the business.
By Eric Schroeder
Source: Food Business News
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