Coca-Cola CEO: Key to growth is matching consumer desires

Coca-Cola plans to grow its business by “matching consumer needs and desires” through a strategy spanning the total beverage category.

Speaking to investors at the Consumer Analyst Group of New York (CAGNY) conference today (20 February), CEO James Quincey described the “journey” the business has been on.

“Most of that journey over the 138 years was about brand Coca-Cola, but really now it’s about an expanding total beverage portfolio,” he said.

While the Coca-Cola brand is ranked as one of the biggest in the world, the business claims it still sees a “huge opportunity” for growth. The idea is to drive that growth from a total beverage portfolio, across trademark Coke, sparkling flavours, juices and sports drinks.

Having reorientated itself as a total beverage business in 2017, Coca-Cola remains careful about where and how it invests behind each opportunity, said Quincey.

“It’s not about trying to be everywhere and be everything overnight. It’s about being choiceful on our journey of where we want to drive the next evolution and the next iteration of scale with a growth mindset,” he explained.

Coca-Cola CEO: Knowing ‘what not to prioritise’ is just as important for growth

This “choiceful” approach dictates how the business invests behind different growth opportunities. Chief financial officer John Murphy outlined how each market and brand has different roles with “a specific job description”, which then influences how the business invests.

For example, some brands play “leadership” roles in certain markets, explained Murphy, giving the example of Coca-Cola in Spain. In this case, “the intent would be to grow gross profit ahead of [the business’s] marketing investment growth,” he said.

On the other hand, some brands and markets are in “build” roles, Murphy added, citing Coca-Cola’s sparkling flavours business in Vietnam. Here the intention is to “drive marketing investments somewhat ahead of growth”.

Other markets, like the company’s “fledging” alcohol business in Mexico, represent a “selective play” for the business, meaning investment will be “very focused”.

Consumer centricity

While Coca-Cola is looking to drive growth across its total beverage portfolio the company isn’t setting targets aimed at increasing the proportion of its sales of a specific category, said Quincey. That is despite hearing calls from some quarters to set specific targets six or seven years ago.

Our portfolio needs to be in arm’s reach of desire.

James Quincey, Coca-Cola Company

“That’s then telling the consumer what they want to drink,” he said. “We are very much focused on consumer centricity of our portfolio; doing justice to each brand, making it relevant for each generation and then giving the consumer the ability to choose within the portfolio.”

The company is getting increasingly “granular” in how it addresses consumer needs, he claimed, thanks to the help of data and technology. Quincey explained the business meets those consumer needs through different pack sizes, flavour choices and caffeine or sugar-free options, as well as physical availability.

He quoted the business’s former CEO Robert Woodruff who said Coke needed to be “within arm’s reach of desire”.

“Our portfolio needs to be within arm’s reach of desire,” Quincey added.