Skip to main content

Coca-Cola Takes Action to Reinvigorate Growth

ATLANTA — The Coca-Cola Co. is taking specific actions to reinvigorate growth, the company announced Tuesday. These key initiatives are meant to support its previously announced five strategic priorities to restore momentum and its long-term growth target.

"We are taking decisive action to position The Coca-Cola Co. to continue delivering long-term value for our shareowners," stated Muhtar Kent, chairman and CEO. "We have taken a hard look at our progress to date and realize that while the strategies we laid out at the beginning of the year are on the right track, the scope and pace of our actions must increase."

Coca-Cola expects the macroeconomic environment to remain challenging through 2015, Kent added, but the company is confident in its ability to return to sustainable growth over the long term.

"This confidence is supported by the attractive long-term dynamics of our industry and the unparalleled reach of our brands and our global system," Kent said. "We are fully dedicated to strengthening our position as the world's leading beverage company."

Coca-Cola's key initiatives are:

  • Streamline and simplify its operating model to quicken decision-making and enhance local market focus. These organizational changes will empower employees and link line-of-sight accountability to business results.
  • Expand its current successful productivity program by targeting annualized savings of $3 billion per year by 2019. This will focus on restructuring its global supply chain, including North American manufacturing; implementing zero-based budgeting across the organization; streamlining and simplifying its operating model; and driving increased discipline and efficiency in direct marketing investments.
  • Refocus on its core business model of building great beverage brands and leading a global system of strong local bottling partners. This will include refranchising most Coca-Cola-owned North American bottling territories by the end of 2017, and a substantial portion of the remaining territories no later than 2020.
  • Strategically target brand and growth investments that leverage global strengths. This includes previously announced plans to improve the quantity and quality of marketing, along with future investments that target markets and categories where brands are underfunded relative to opportunity.
  • Focus on driving revenue and profit growth across markets while providing local operations with a clear line of sight and aligned compensation targets. Revenue growth will be added as a metric in Coca-Cola's incentive plans starting in 2015.

"While investments made in recent months are yielding early signs of progress, we recognize that our five strategic priorities and the initiatives announced today will take time to produce results," Kent stated. "We remain confident in the vibrancy of the nonalcoholic ready-to-drink beverage industry and are determined to make the necessary changes to sustainably meet or exceed our long-term growth targets. At the same time, we are cautious in our near-term outlook given challenging macroeconomic conditions. In this context, our 2020 Vision will remain focused on delivering value growth ahead of the industry for our system."

This ad will auto-close in 10 seconds