Coke adapts to "mega-trends"

NEW YORK: Coca-Cola, the soft drinks giant, will adapt its strategy in order to reflect five global "mega-trends", such as urbanisation, consumer empowerment and the ageing of the population in many markets.

The first of these processes is urbanisation. The proportion of people living in cities has now surpassed 50% worldwide, and should reach 70% by 2050, necessitating new supply chain and logistical models.

"Our businesses will not only need to collaborate better with each other but also work more closely with cities as they modernise their infrastructures," Muhtar Kent, Coca-Cola's chief executive, told the BBC.

Secondly, by 2047, the number of individuals over 60 years of age will be higher than those under 15 years of age, a shift presenting substantial possibilities for suitably adaptive organisations.

"This will mean new opportunities for some industries, as more mature consumers tend to have greater disposable income," said Kent. "Along the way, we can expect more focused marketing and greater reliance on home delivery."

Thirdly, Kent pointed to the rise of the middle class, which should expand by 1bn people in the coming ten years. By 2030, over 90% of this audience are set to reside in emerging nations, compared with 50% today.

"While this new wealth represents a huge growth opportunity for manufacturers and retailers, it is also likely to create new resource stresses and cost pressures on some commodities", he added.

Fourthly, customers are increasingly "in the driving seat", as evolving technologies transform their expectations and ability to influence companies. By 2013, for example, there will be 2bn mobile users, while a third of purchases are due to be completed online by 2020.

"Ultimately, new ways of connecting offer fresh and exciting opportunities to engage with digital consumers and improve their shopping experiences," said Kent. "Even so, retailers and FMCG firms will need more advanced real-time insights to better serve this dynamic, fragmented market."

Among the requirements on companies will be finding the right channels through which to converse with shoppers, alongside leveraging big data and embracing collaboration.

Finally, Kent suggested, sustainability will assume heightened importance. By 2030, the global population should hit 8.3bn, while the demand for food and energy is anticipated to leap by 50%, an acceleration standing at 30% for fresh water.

Coca-Cola has launched the PlantBottle, which is fully recycled and made up of 30% plant constituents. It intends to use this technology in all plastic bottles by 2020, as well as reducing its carbon footprint and net water usage.

Data sourced from BBC; additional content by Warc staff, 27 June 2012

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