Coke sets out ambitious growth plans

18 November 2009

ATLANTA: Coca-Cola, the US soft drinks giant, is hoping to double the revenues generated by its core and bottling operations to $200 billion (€134bn; £119bn) by 2020, with new product launches and major marketing campaigns set to be among the key drivers of this growth.

At an event for investors held earlier this week, the owner of Sprite and Fanta outlined its intention to increase the number of its drinks sold each day to 3 billion by the end of the next decade.

Muhtar Kent, its president/ceo, said this meant the Atlanta-based firm would have to perform ahead of the high-end of its typical target annual expansion rate of 5% to 6%, but was "definitely achievable."

"It's going to take a lot of work. It's going to take some fantastic marketing and a lot of synergies to be powered back into marketing. But we believe our system has the capacity to achieve that trajectory," he suggested.

Several other factors are working in the beverage maker's favour in achieving this goal, he added, including the improving economic strength of several key emerging nations, rising levels of urbanisation, and the growth in the size of the middle class.

In just one example of the possibilities available, shoppers in China currently drink just eight portions of Coke a year, compared with a total of 214 in the US, and 387 in Mexico.

Alongside its eponymous cola, the Atlanta-based firm has 12 further brands that deliver more than $1bn in retail sales at present, from Powerade, its sports drink, to Georgia, the coffee range.

Its efforts to reach $200bn in revenues over the period to 2020 will see Coca-Cola attempt to increase the number of such brands to at least 30 by this date.

Alongside an emphasis across its portfolio, however, Kent argued "we must continue to grow the epicenter of our business – trademark Coca-Cola."

"We know that winning in 2020 and beyond is going to require new capabilities, new models and new innovations," he added.

The drinks titan has previously announced that it will invest heavily in China, India and Brazil over the next few years, which could offset slowing sales in its home country, and other core areas like Japan.

More specifically, it will continue to spend on building its brands, with redesigned packaging, as well as new products across a range of different price points, also receiving further attention.

A marketing campaign tied to the FIFA World Cup in South Africa in 2010 will be among its main communications initiatives in the near future, but it has a considerably broader long-term strategy.

"We are laser-focused on targeting the right consumers with fully integrated global marketing campaigns that work on many levels, across many geographies and cultures, and leverage a rich variety of media and channels," said Kent.

As part of this process, Coke will aim to attract both younger and ageing shoppers, with the development of this latter demographic having been argued to constitute a global "megatrend" by Credit Suisse.

"To target ageing and affluent consumers globally, we are actively exploring new ingredients, new functionality and new occasions," Kent said.

"At the same time, we are creating new strategies that are winning over a massive new generation of teens to drive growth of trademark Coca-Cola."

Alongside a number of other major advertisers, Coca-Cola has also been placing a heightened emphasis on issues relating to the environment, such as by launching a bottle partly made from plant extracts.

Its overall CSR objectives include becoming the "global leader" in terms of sustainable water and energy use, as well as for its packaging and climate protection activities.


Data sourced from Reuters, Wall Street Journal, Coca-Cola; additional content by Warc staff