ATLANTA, GA: Coca-Cola attributed its better-than-expected performance in the fourth quarter to increased media spend, with the CEO reporting double digit increases for the quarter and the full year.
In an earnings call, Muhtar Kent outlined how, over the past year, the company had invested "significantly" in both brands and incremental growth opportunities.
"We substantially increased our media investment in markets and categories where our media was underfunded relative to the market opportunity, where we had the right price tag, channel architectures and where we had clear executional alignment with our bottlers," he explained.
"The quality of our media has been increasing and we intend to improve it even further," he added, in reference to the appointment of a new global CMO in Marcos de Quinto.
Kent also highlighted how the company's portfolio of brands was changing. It now has a total of 20 billion dollar brands, he said, of which 14 are in the Still category, with the remaining six in Sparkling.
That gave it the opportunity to target a greater number of consumption occasions. He noted that the average household globally consumes some 26 beverages per day of which only 1.4 are a Coca-Cola company brand.
"Our opportunity to capture more beverage [occasions] is just immense," Kent stated. This was the reason for strategic investments in coffee business Keurig Green Mountain and Monster Beverage Corporation, a maker of energy drinks and natural soft drinks.
"Both of these investments underscore not only our ability to adapt to changing consumer trends but also our commitment to accelerate innovation," Kent declared.
One of those trends – the purchase of smaller cans – was singled out by Sandy Douglas, president, Coca-Cola North America. Sales of mini-cans were up 15% in the fourth quarter, he said, "following the consumer to smaller packaged sizes of the brands they love".
Having reviewed the year just gone, Kent said 2015 would be "a transition year as we rewire our operating model for growth and mix in uncertain global consumer environment".
Data sourced from Seeking Alpha; additional content by Warc staff