coca cola company distribution strategy

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Coca-Cola’s Business And Distribution Strategy In A Nutshell

Coca-Cola follows a business strategy (implemented in 2006) where it invests initially in bottling partners’ operations through its operating arm – the Bottling Investment Group.

As they take off, Coca-Cola divests its equity stakes and establishes a franchising model as a long-term growth and distribution strategy .

Table of Contents

The secret isn’t in the secret formula but in its distribution strategy .

The Coca-Cola Company’s business model is based on five large independent bottling partners.

In 2019, these five bottling partners represented 40 percent of the total unit case volume the company sold.

Coca-Cola has separate agreements with bottling partners for manufacturing and selling the company’s products.

As specified by Coca-Cola,

“The bottler’s agreements generally authorize the bottlers to prepare, package, distribute and sell Company Trademark Beverages in authorized containers in an identified territory. The bottler is obligated to purchase its entire requirement of concentrates or syrups for the designated Company Trademark Beverages from the Company or Company-authorized suppliers.”

Coca-Cola typically agrees to refrain from selling or distributing, or from authorized third parties to sell or distribute, the Company Trademark Beverages throughout the identified territory, to guarantee bottling partner exclusivity under that territory and product .

However, Coca-Cola typically reserves the right to manufacture and distribute its trademarked products and brands.

In exchange, Coca-Cola also participates in its bottling partners’ sales and marketing activities.

For instance, in 2019, Coca-Cola spent $4.4 billion in promotional and marketing programs with bottling partners.

Coca-Cola’s short-term chain, long-term franchise-model

Coca-Cola’s strategy for building, growing, and maintaining its distribution system is pretty fluid.

Indeed, in most cases, Coca-Cola leverages a network of independent bottling partners.

In some cases, Coca-Cola places strategic investments in some bottling partners’ operations.

It does that either to enable entry into a local market by leveraging Coca-Cola’s group resources or to maintain control of the bottling partner.

In the long-term, Coca-Cola will divest its stake as the bottling partner operations take off, thus enabling Coca-Cola to keep its capital requirements low while keeping a minor stake in the bottling partner, thus guaranteeing control and cooperation.

Therefore, the distribution system and the bottling partners are organized as a hybrid approach between chain and franchise.

Where in the short term, Coca-Cola acts as a chain of bottling companies. Long-term, it acts more like franchising, where bottling partners are kept mostly independent yet tied to the Coca-Cola brand .

This mixed distribution system of owned and non-owned bottling partners is the Coca-Cola system which sold 30.3 billion unit cases in 2019.

Trademark Coca-Cola accounted for 43 percent of U.S. unit case volume.

Re-franchising or “going franchise”

For instance, in 2019, Coca-Cola acquired controlling interests in bottling operations in Zambia, Kenya, and Eswatini.

As those bottling operations will become stable and established over time, Coca-Cola will re-franchise them.

Therefore, it will sell its controlling stake, having a franchisor-franchisee relationship with those bottling partners.

In some cases, it might keep a minor equity stake to keep more control over the operations.

In 2018, for instance, Coca-Cola had a few hundred million in proceeds as it re-franchised its Canadian and Latin American bottling operations.

This is how Coca-Cola keeps its CAPEX low while still keeping control of the bottling operations and enabling expansion and capillary distribution !

This is how Coca-Cola represents its system:

https://author-prod-go-aem6-4.coke.com/assetdetails.html/content/dam/journey/us/en/testimages/sustainability-story-desktop-703x450.jpg

While in the directly owned bottling facilities, Coca-Cola sells directly, independent bottling partners manage distribution in the concentrate operations.

Therefore, Coca-Cola makes money by selling its concentrate to bottling partners ( they must place an entire order for the concentrate available in that territory as part of the bottling agreement ).

To handle those operations, Coca-Cola introduced 2006 the Bottling Investment Group, which managed the bottling operations’ acquisition, divestment, and re-franchising.

The graphic below gives a good picture of the overall process and strategy which has been implemented since 2006:

Coca-Cola vs. McDonald’s distribution strategy

Here we can draw the difference between Coca-Cola’s and McDonald’s distribution strategies.

Both companies have found an ingenious way to scale up operations while maintaining control over the business .

In the case of Coca-Cola, the company employs a franchained model , where the company first controls operations in the short term.

Once those have been established, it moves to a licensing/partnership/exclusivity model , where it can keep control of its bottling partners while making its overall organization lighter.

McDonald’s also employs an interesting model , which is a heavily franchised one.

Indeed, as of 2022, most McDonald’s restaurants are franchises.

Yet, to keep lousy control over the franchising operations, McDonald’s directly negotiate lease terms, and it’s usually the owner/or primary renter of the land where the franchising operations sit.

In this way, McDonald’s lessens the cost of owning and operating franchises directly, while still allowing franchise restaurants to follow the company’s policies via its lease operations.

In that respect, McDonald’s is more of a real estate company than a restaurant business .

Key takeaways

An ingenious distribution network and the system drive the Coca-Cola business model .
Beginning in 2006, Coca-Cola established the Bottling Investment Group, which invests initially in bottling companies by bringing them under the control and ownership of Coca-Cola.
As local operations are established, and marketing and distribution activities run efficiently, Coca-Cola divests its controlling stakes, thus forming a franchising relationship with its bottling partners.
Bottling partners keep an exclusivity agreement with other third-parties bottling companies to produce or distribute under the territories those bottling partners control. For the products they bottle up, Coca-Cola also reserves its right to manufacture and distribute its products.
Coca-Cola, in turn, sells concentrate to those bottling companies, which act as franchisees for the branded Coca-Cola products.

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Coca-Cola’s Financials

Coca-cola’s business segments, coca-cola’s recent developments.

Company Profiles

Consumer Staples

How Coca-Cola Makes Money

Syrup and finished product sales make up the bulk of revenue

The Coca-Cola Company's ( KO ) distribution model is an integral part of its success. Its unique business model has served the company well since bottling first began in 1894. John Stith Pemberton, a pharmacist living in Atlanta, created the flagship soda, Coca-Cola, in 1886.

The company has operated under a franchise distribution model since 1889 and was incorporated in 1892. Coca-Cola has risen to global prominence and is the largest nonalcoholic beverage company in the world.

In 1894, Mississippi businessman Joseph Biedenharn installed bottling machinery behind his soda fountain store. He did this in order to make Coca-Cola much more portable. Five years later, three entrepreneurs in Tennessee purchased the exclusive rights to bottle and sell Coca-Cola for $1.

This posed many problems for the company, from limitations by competitors and the need for consistency across the product line. In 1916, Coca-Cola bottlers agreed on the iconic contour design bottle that still remains.

The Coca-Cola Company is considered the largest non-alcoholic beverage company in the world, reaching consumers in more than 200 countries. It has roughly 200 master brands that are grouped into categories such as sparkling soft drinks, sports drinks, juices, energy drinks, and tea and coffee. Some of the most popular brands include Coca-Cola, Sprite, Fanta, Powerade, and Dasani.

According to the company's website, it has approximately 950 production facilities worldwide and about 200 bottling partners around the globe. The number of Coca-Cola bottlers exploded to over 1,200 plants by 1920.

So how does this global powerhouse make money? Keep reading to find out more about the company's business model, its financial achievements, as well as its business segments.

Key Takeaways

The Coca-Cola Company is the largest non-alcoholic beverage company, reaching more than 200 countries.
Coca-Cola neither completes nor bottles the majority of its products.
The company generates revenue by selling concentrates and syrups to bottling facilities globally and by selling finished products to retailers and other distributors.
Coca-Cola has four geographic and two non-geographic business segments.
The company has a number of initiatives in place to address water quality, packaging, climate change, and corporate diversity.

Coca-Cola released its Q1 2023 results on April 24, 2023. The company reported consolidated net operating revenue of $10.98 billion for the quarter. That's a 5% increase from the same period the previous year. The primary driver in revenue growth was an 11% increase in price/mix. Gross profits increased by 4% from the same period, going from $6.40 billion to $6.67 billion.

Coca-Cola was the world's most valuable non-alcoholic beverage in 2022.

North America was the area that posted the highest revenue in the quarter, coming in at about $3.90 billion. The company's Bottling Investments Group (BIG) reported roughly $1.95 billion in revenue, and the company's Europe, Middle East, and Africa division reported $2.02 billion in revenue.

The bulk of the company's revenue is derived from its two key businesses—the concentrate business and its finished product business.

Concentrate Business

Coca-Cola manufactures and sells syrup to authorized bottlers. These partners then add water and carbonation to make and sell finished Coca-Cola products. This division is referred to as the company's concentrate operations.

Coca-Cola has supported the consolidation occurring among its bottlers. That's because having many small independent bottlers created several macro and microeconomic challenges for the company. Smaller independent bottlers often lack the financial assets to continue operations and fund investments when they're faced with economic hurdles. This leads to financial troubles for Coca-Cola.

The company responded by creating its Bottling Investments Group. This group identifies struggling franchisees , providing them with financial and institutional support. The company sends experts and resources to drive growth and return the franchise to profitability. Once they achieve profitability and stability, the company finds a qualified bottler to assume operations.

According to the company's website, BIG operates in parts of Africa, South Asia, and Southeast Asia. It completed refranchising in Canada, the United States, Guatemala, Uruguay, and China.

Finished Product Business

The company also manufactures its own fountain syrups, manages several bottling operations, and collects revenue on finished products. These operations fall under Coca-Cola's finished product operations. This business segment is made up of both company-owned or controlled operations in both sales and distribution. This includes the sale of sparkling beverages and nonalcoholic drinks to retailers. They are also sold to distributors and wholesalers who, in turn, sell them to retailers.

Coca-Cola is a dominating force in the United States with almost 46% of the country's carbonated soft drink market.

Coca-Cola operates business segments in four geographic areas and two non-geographic ones:

North America: This is the flagship segment of the company. This market has a value of $228 billion and approximately 320 million consumers.
Latin America: This market has approximately 520 million consumers who span 39 different markets that contribute a value of about $72 billion.
Europe, Middle East & Africa: Comprised of roughly 130 different markets, this segment is valued at $254 billion, thanks to roughly 2 billion consumers.
Asia Pacific: This market has the most consumers, totaling 3.3 billion. A total of 37 markets contribute $308 billion in value.
Bottling Investment Group (BIG): This group was formed in 2006. As noted above, this division is responsible for ensuring that bottling operations get the investments they need to succeed.
Global Ventures (GV): The division was created in Jan. 2019 to oversee acquisitions and to integrate brands into the company.

The company has several initiatives in place according to the company's website. The following are some of the key initiatives in place:

Water leadership: Water is an integral part of Coca-Cola's business. This is why the company considers water quality as an important part of its production. It is also committed to using water efficiently, replenishing the water it uses, and treating the wastewater produced. By 2030, the company wants to achieve 100% regenerative water use across 175 facilities identified as facing high levels of water stress.
Packaging The company is taking steps to make 100% of its packaging recyclable globally by 2025 and to use at least 50% recycled content in their packaging by 2030. By 2030, the company also seeks to have at least 25% of its beverages worldwide by volume sold in refillable/ returnable glass, plastic bottles, or in fountain dispensers with reusable packaging.
People and communities: Coca-Cola's mission is for the company to emulate the diversity of its consumer market. It aims to have women represent 50% of its leadership on a global scale and for its U.S. employee base to correspond to census data in terms of race and ethnicity by 2030.
Climate: By 2030, the company aims to reduce absolute emissions by 25% against a 2015 baseline. It seeks net zero emissions by 2050.

The Coca-Cola Company. " History ."

InterExchange. " History of Coca-Cola ."

Biedenharn Coca-Cola Museum. " JOSEPH BIEDENHARN: 'The First Bottling of Coca-Cola.' "

The Coca-Cola Company. " ABOUT THE COCA-COLA COMPANY ."

The Coca-Cola Company. " The History of the Coca-Cola Contour Bottle ."

The Coca-Cola Company. " THE COCA-COLA SYSTEM ."

The Coca-Cola Company. " Coca-Cola Reports First Quarter 2023 Results ," Page 8.

Statista. " Brand Value of the Most Valuable Non-Alcoholic Beverage Brands Worldwide as of 2022 ."

The Coca-Cola Company. " Coca-Cola Reports First Quarter 2023 Results ," Page 11.

Coca-Cola Pakistan. " THE COCA-COLA SYSTEM ."

The Coca-Cola Company. " Bottling Investment Group (BIG) ."

Statista. " Coca-Cola Company - Statistics & Facts ."

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The Coca-Cola Company. " The Coca-Cola Company 2022 Business & Sustainability Report ."

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The Coca-Cola Company’s distribution strategy

Authored by Lucius Lu and Sophia Tiwana

According to official statistics, an amazing 1.9 billion products of Coca-Cola are sold around the world everyday.

The Coca-Cola Company is a global business that operates on a local scale, in every community where they do business. The term is second most well known after okay, making it recognisable in nearly all communities and cultures across the globe. The Company is able to create a global a global reach with local focus because of the strength of its system, which comprises the Coca-Cola Company and their more than 250 bottling partners worldwide.

The system has numerous legal and managerial departments and sections,all independent of each other, and it does not own or control all of it bottling partners worldwide.

While it is generally perceived that Coca-Cola runs all its operations globally it, this process it done through various local channels. The Company manufactures and sells concentrates, beverage bases and syrups to bottling operators. It still however, owns the brand and is responsible for consumer brand marketing initiative. The bottling partners manufacture, package and distribute the final branded beverages to customers and vending partners, who then sell products to consumers.

All bottling partners work closely with suppliers- grocery stores, restaurants, convenience stores, amongst many others- to execute localised strategies developed in partnership with Coca-Cola. More precisely, although Coca-Cola is a global company, its products never have to travel far to reach the final consumer, making the product more local than you may think, the product is made local to the market where it is sold.

Their business is a local business, typically products aren’t shipped more than a few hundred miles; it’s all about being responsive to the customers needs and the local tastes of the consumers in every market. The Coca-Cola Company sells its products to bottling and canning operations, distributers, fountain wholesalers and some fountain retailers. They then distribute them to retail outlets, corner stores, restaurants, petrol stations and many more.

Arrays of points of sales that Coca-Cola products can roughly be categorised into are:

– Wholesalers/ distributers

– Retail/ corner stores/ super markets

– Restaurants/ cafes/ night clubs

– Petrol stations

– Automated teller machines (AMTs)

The firms distribution system is one of the most well planned and executed compared to all other drinks of the same category. It has such an impact on consumers and is so successful that even wholesalers and distributers need the product for their business’ success. Coke’s position on consumer’s mind makes it essential to retailers and wholesalers. They have achieved their goal due to this high visibility, and to the availability of their products all over the world, even remote places.

Here is a video showing Coke’s innovation in its distribution system:

Coca-Cola’s vending machines are also a way the brand stays true to its identity of #sharinghappiness. Innovations in this channel are numerous, but we have selected a lovely one for you: the hug machine!

References:

http://www.coca-colajourney.com.au/our-company/about-the-coca-cola-system

http://zh.scribd.com/doc/30939798/Distribution-Channel-at-Coca-Cola#scribd

http://scw-mag.com/index.php/sections/distributers/143-the-coca-cola-company

The Magic of the Coca-Cola Supply Chain & What Companies Can Learn

Coca-Cola is a household name. With 48% of global market share and two of the world’s top three beverages, it’s no secret that Coca-Cola is a successful brand .

But what makes Coca-Cola so unique is not just its product. The Coca-Cola supply chain is a well-oiled machine with far-reaching impact and a seamless operating model.

What exactly has made the iconic brand operate so efficiently for over 130 years?

The Coca-Cola distribution strategy puts its focus on local opportunities. The product starts with Coca-Cola, which sells the necessary components to bottling manufacturing companies. From there, bottler partners manufacture, package, merchandise, and distribute the final branded product to customer vending partners who then sell it to the consumer.

The Coca-Cola supply chain is a model of efficiency.

With over 225 bottling partners worldwide and over 900 Coca-Cola bottling plants, this localized approach allows the company to deliver a drink from the factory straight into the hands of a customer with ease.

What are the core components of Coca-Cola’s supply chain?

The company also puts an emphasis on several other components across the supply chain of Coca-Cola which make it truly unique.

Adoption of technology. Coca-Cola and its bottling partners are consistently investing in advanced technologies as a way to digitize the supply chain process. This includes warehouse technologies , 3D printing, and innovative solutions surrounding production .
Logistics team. Coca-Cola logistics is a team specifically tasked with visibility into the distribution process, from the warehouse to the store shelves.
Retail partnerships. Coca-Cola has high standards when it comes to retail partnerships and values longevity. For instance, the company has partnered with McDonald’s since 1955.
Suppliers. Coca-Cola suppliers are seen as critical to the organization’s success and sustainability . Supplier partners participate in events like the supplier relationship management program and supplier innovation days alongside Coca-Cola.
Quality control. The company has incredibly strict quality control standards across its various products. Suppliers are required to gain certification in quality, environment and health and safety.
Global Supply Chain Council. Coca-Cola formed a Global Supply Chain Council with its bottler partners. Sub-committees are formed around the company’s overall strategies and best practices are shared to better the overall Coca-Cola supply chain operation.

Coca-Cola Product Touchpoints

There are four main players in the Coca-Cola supply chain system:

Manufacturer

Distributor.

Coca-Cola itself serves as the manufacturer, creating the concentrated syrup that will eventually become Coca-Cola brand products. They then sell these concentrates, beverage bases, and syrups to a bottling partner.

Once the concentrate is sold, it is sent on to the bottling partners in a separate manufacturing facility. There, the concentrate is mixed with water, carbon dioxide, and sugar, which are locally sourced.

The Coca-Cola distribution channel strategy creates relationships with these local sources. Manufacturing plants are set up close to where sugar grows, decreasing the time needed for the delivery of goods to the plant. Local partners have the ability to choose the type of sugar to be used. For instance, in America, the sugar used comes from corn syrup. In Europe, beet sugar is often used.

It is up to the bottling partners to prepare, package, sell, and distribute finished beverages to retailers.

The finished product operations for Coca-Cola consists of company-owned or company-controlled bottling, sales and distribution operations. Working through the Coca-Cola Export Corporation, local bottlers around the world distribute the drink in their markets.

These customers include grocery stores, restaurants, street vendors, convenience stores, movie theaters, amusement parks, and more.

Coca-Cola is one of the most recognizable consumer brands in the world. Retailers distribute Coca-Cola and its various products into the hands of consumers around the world. It is estimated that 1.9 billion servings are issued per day.

Be like Coke with a mobile food & beverage supply chain

What can you learn from the coca-cola supply chain.

Coca-Cola has achieved an unparalleled level of success. Yet, there are several key takeaways that organizations can learn from the Coca-Cola supply chain system and its process.

Concentrate on quality control and procurement management

Coca-Cola has a constant eye on its inventory and how each piece affects the overall supply chain. For instance, the company chooses a specific group of approved suppliers based on a stringent set of standards, including location, size, equipment level, supply and demand for raw materials, and so on. Bottling partners are only allowed to buy from this approved supplier list. This allows Coca-Cola to ensure the quality of their inventory when multiple partners are involved.

In addition, the company regularly reviews its supply chain operations. Monitoring occurs at all levels, including bottlers, Coca-Cola distribution channels, and retailers. By regularly reviewing supplier performance based on field feedback, action plans can be developed and issues that may affect the larger supply chain can be addressed head-on.

One way to get similar end-to-end insight into your warehouse operation is through a warehouse management system (WMS). Over 90% of warehouse leaders believe the functionality of a WMS will benefit mobile-equipped workers. However, mobile barcoding can provide core WMS capabilities through advanced barcode scanning—without the complexity or expense.

RFgen’s mobile warehouse solutions incorporate mobile data collection with logistics functionality. By capitalizing on mobile barcoding capabilities, companies can achieve material visibility during the production cycle, track and direct materials and incorporate Industry 4.0 technologies. This allows direct movement of employees, materials, and warehouse robotics to create an advanced materials flow and a more productive supply chain.

In addition, warehouses should focus on connecting inventory lifecycles, ensuring up-to-date changes are documented as they happen and flow into an ERP system. Reliable data capture, in addition to end-to-end visibility, will allow any warehouse to embrace agility the way Coca-Cola has.

Create strong partnerships

Coca-Cola’s supply chain structure depends on long-term collaboration with retail partners and bottlers.

Helen Davis, vice president of supply chain for the U.S. region for Coca-Cola told Supply Chain World : “The Coca-Cola bottling business was built on strong franchise leadership. As we continue our strategy of re-franchising our bottling systems across the globe, it is imperative that franchise bottlers work together to leverage the opportunities within our supply chains.”

The product itself is essentially created by one of its trusted bottling partners with locally sourced water and sugar, then distributed to a variety of food wholesalers, supermarkets, chains, and more. By centralizing decision-making and working collaboratively with its partners, Coca-Cola can deliver a quality, consistent product from the factory floor to the shelf in record time.

Creating strong strategic partnerships with trusted, experienced vendors is critical to any organization’s success. By working alongside a company with deep supply chain and mobility expertise, manufacturing entities can enhance their capabilities and address issues head-on to create lasting success.

Make technology and automation a priority

Coca-Cola sees technology and digitization of workflow as essential to the company’s overall strategic plans and initiatives. A few of the types of technology they embrace include:

Warehouse technology
New block production lines
3D printing to manufacture bottles and cans
Artificial intelligence in procurement
Streamlined software for enhanced visibility

For manufacturers in today’s market, this type of technology is not a pipe dream for large companies like Coca-Cola. Rather, all levels of manufacturing entities can embrace digital automation, enabling employees to respond faster and work smarter to deliver optimal workflows.

There are numerous ways to do this, but one way is by utilizing mobile automation through the use of barcode scanning on handheld devices. This process eliminates the need for manual processes and data entry, all while providing accurate inventory management.

Barcode and mobile scanning is a growing trend too, with 59% of respondents to the RFgen Digital Inventory Report noting an intent to add mobile scanning to their warehouse automation mix.

After-sales logistics

Whatever the product, Coca-Cola has one goal: to send the goods from its warehouses quickly. The logistics structure designed by Coca-Cola allows them to do just that, meeting the needs of the customer through transfer, storage, and placement of inventory.

Logistically, Coca-Cola does this by manufacturing products more frequently, establishing production plans close to its customers, including daily interaction between all points of contact on the supply chain and the main site, and adhering to the same after-sales process for all supply chain participants.

“The market has shifted to an on-demand environment. The expectation is that consumer demands are delivered with speed. The challenge is to be able to keep up with changing consumer preferences at an efficient and low cost,” says Davis to Supply Chain World.

Coca-Cola is not alone in this shift. Our customers have seen a 67% increase in surging customer demand recently. This type of increase dramatically impacts any type of pre-existing supply chain structure.

The Future of Inventory Management and Mobile Technologies

Manufacturers must turn to new ways of inventory management to meet the challenge. Mobile barcoding software, for instance, can directly integrate with enterprise systems to enhance real-time performance and visibility.

Barcode scanning, mobile devices, and warehouse management solutions are proven to boost production, impact supply chain management, and update outbound shipping and warehouse operations. The result is greater efficiency across the product lifecycle, setting the foundation for long-term success.

Transform Your Supply Chain

Overcome labor challenges, slash costs, and transform inventory control with next-gen mobile data collection. Talk to an RFgen expert today!

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About The Coca-Cola Company

The world’s most valuable brand portfolio with unparalleled distribution capabilities.

Company Profile

Total beverage company.

The Coca-Cola Company (NYSE: KO) is a total beverage company with products sold in more than 200 countries and territories.

Our company’s purpose is to refresh the world and make a difference. We sell multiple billion-dollar brands across several beverage categories worldwide. Our portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Our water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Gold Peak and Ayataka. Our juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS.

We’re constantly transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to market. We seek to positively impact people’s lives, communities and the planet through water replenishment, packaging recycling, sustainable sourcing practices and carbon emissions reductions across our value chain. Together with our bottling partners, we employ more than 700,000 people, helping bring economic opportunity to local communities worldwide.

At-A-Glance

137 years of.

Refreshing PEOPLE EVERYWHERE

Master Brands

Products Sold In

200+ countries and territories

Worldwide in NARTD Value

Sparkling Soft Drinks

Juice, Value-Added Dairy & Plant-Based Beverages

Water and Sports Drinks

System associates worldwide

Bottling partners

Bottling plants

Retail customer outlets

Invested $8B+

System Capital Expenditure Investment in 2022

Select Well-Known Coca-Cola Company Brands

The Coca-Cola Company Strategy

Building on solid foundations within a growing and vibrant industry.

At The Coca-Cola Company, we are in pursuit of becoming an even more consumer-centric total beverage company. Beverages are a growing and vibrant industry with long-term growth opportunities well into the future. We have established a platform for sustained performance in order to capitalize on that opportunity centered around disciplined portfolio growth, an aligned and engaged bottling system and winning with our stakeholders. All underpinned by digitizing our enterprise, fostering a growth and inclusive culture, and growing sustainably.

View Our Strategy

Our platform to accelerate revolves around the following strategies:

Vision : Total Beverage Company
Growth Strategy : Pursuing Excellence Globally and Winning Locally
Sustainability: Leading in Sustainability With Collective Action
Financials : Compounding Quality Value

Operating Segments

We operate as a local company with a truly global presence.

The Coca-Cola Company’s operational structure includes four geographic operating segments: Europe, Middle East & Africa; Latin America; North America; and Asia Pacific. The company reporting structure also includes the non-geographic segments of Global Ventures and Bottling Investments.

Production and Distribution

The coca-cola system.

The Coca-Cola Company manufactures, markets, and sells certain beverage concentrates, syrups, and finished beverages to authorized bottling partners. Depending on the product, our bottling partners combine the concentrates with sweeteners, still water, and/or sparkling water, to prepare, package, sell, and distribute finished beverages.

* The Coca-Cola Company and its bottling partners are collectively known as the Coca-Cola system. The Coca-Cola Company does not own, manage or control most local bottling companies.

About The Coca-Cola System

Concentrate Operations

We manufacture, market, and sell beverage concentrates, sometimes referred to as "beverage bases," and syrups, including fountain syrups.

Finished Product Operations

In addition to concentrates and syrups, we also manufacture, market, and sell finished sparkling soft drinks and other nonalcoholic beverages.

Bottling Partners

Our bottling partners and some Company-owned operations manufacture, package, merchandise, and distribute the finished branded beverages to our customers and vending partners, who then sell our beverages to consumers.

Driving the Growth Agenda

Meet our people.

Our company’s focus on disciplined portfolio growth and value creation is the product of our people and their strong commitment to creating beverage brands that are loved and shared by people around the world.

Coca-Cola Leaders

View Board of Directors

Presentations

View presentations, transcripts, and videos from The Coca‑Cola Company.

View investor-related contacts for The Coca-Cola Company.

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Investors and Analysts : Tim Leveridge, koinvestorr[email protected] Media : Scott Leith, [email protected]

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Distribution strategy of Coca- Cola

Thread starter rohiniu
Start date Mar 27, 2011
Tags channel motivation channel strategy channel value proposition coca cola company in us consumer location distribution distribution activities distribution channel distribution strategy distributionchain document automation exclusive distribution extended enterprise intensive distribution liquid logistics logistical strategy marketing channel monitoring channels packaging and labeling strategy

Par 100 posts (V.I.P)

Mar 27, 2011

The Coca-Cola Company is a beverage retailer, manufacturer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves 1.6 billion servings each day. The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments. The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent. Coca Cola Company makes two types of selling 1)Direct selling = In direct selling they supply their products in shops by using their own transports. They have almost 450 vehicles to supply their bottles. In this type of selling company have more profit margin. 2)Indirect selling = They have their whole sellers and agencies to cover all area. Because it is very difficult for them to cover all area of Pakistan by their own so they have so many whole sellers and agencies to assure their customers for availability of coca cola products. Objectives: A firm’s distribution objectives will ultimately be highly related—some will enhance each other while others will compete. For example, as we have discussed, more exclusive and higher service distribution will generally entail less intensity and lesser reach. Cost has to be traded off against speed of delivery and intensity (it is much more expensive to have a product available in convenience stores than in supermarkets, for example). Narrow vs. wide reach: The extent to which a firm should seek narrow (exclusive) vs. wide (intense) distribution depends on a number of factors. One issue is the consumer’s likelihood of switching and willingness to search. For example, most consumers will switch soft drink brands rather than walking from a vending machine to a convenience store several blocks away, so intensity of distribution is essential here. However, for sewing machines, consumers will expect to travel at least to a department or discount store, and premium brands may have more credibility if they are carried only in full service specialty stores. Retailers involved in a more exclusive distribution arrangement are likely to be more “loyal”—i.e., they will tend to • Recommend the product to the customer and thus sell large quantities; • Carry larger inventories and selections; • Provide more services Thus, for example, Compaq in its early history instituted a policy that all computers must be purchased through a dealer. On the surface, Compaq passed up the opportunity to sell large numbers of computers directly to large firms without sharing the profits with dealers. On the other hand, dealers were more likely to recommend Compaq since they knew that consumers would be buying these from dealers. When customers came in asking for IBMs, the dealers were more likely to indicate that if they really wanted those, they could have them—“But first, let’s show you how you will get much better value with a Compaq.” Distribution opportunities : Distribution provides a number of opportunities for the marketer that may normally be associated with other elements of the marketing mix. For example, for a cost, the firm can promote its objective by such activities as in-store demonstrations/samples and special placement (for which the retailer is often paid). Placement is also an opportunity for promotion—e.g., airlines know that they, as “prestige accounts,” can get verygood deals from soft drink makers who are eager to have their products offered on the airlines. Similarly, it may be useful to give away, or sell at low prices, certain premiums (e.g., T-shirts or cups with the corporate logo.) It may even be possible to have advertisements printed on the retailer’s bags (e.g., “Got milk?”) Other opportunities involve “parallel” distribution (e.g., having products sold both through conventional channels and through the Internet or factory outlet stores). Partnerships and joint promotions may involve distribution (e.g., Burger King sells clearly branded Hershey pies). Deciding on a strategy. In view of the need for markets to be balanced, the same distribution strategy is unlikely to be successful for each firm. The question, then, is exactly which strategy should one use? It may not be obvious whether higher margins in a selective distribution setting will compensate for smaller unit sales. Here, various research tools are useful. In focus groups, it is possible to assess what consumers are looking for an which attributes are more important. Scanner data, indicating how frequently various products are purchased and items whose sales correlate with each other may suggest the best placement strategies. It may also, to the extent ethically possible, be useful to observe consumers in the field using products and making purchase decisions. Here, one can observe factors such as : (1) how much time is devoted to selecting a product in a given category, (2) how many products are compared, (3) what different kinds of products are compared or are substitutes (e.g., frozen yogurt vs. cookies in a mall), (4) what are “complementing” products that may cue the purchase of others if placed nearby. Channel members—both wholesalers and retailers—may have valuable information, but their comments should be viewed with suspicion as they have their own agendas and may distort information. Outsourcing distribution and manufacturing: Coca-Cola India minimised its capital needs by meeting new manufacturing capacity needs throughexternal co-packers, outsourcing its distribution and meeting its in-market-refrigeration and cooling needs by giving incentives to retailers to self-fund the same through its “Own Your Fridge Scheme.” Today, the company has an extensive rural and urban distribution network. Coca-Cola adopts a hub and spoke format distribution network ensuring that large loads travel longer distances and short loads travel short distances. The company has increased its village penetration from 9 per cent in 2000 to 28 per cent in 2004 and covers approximately 175,000 villages today. Rural India now accounts for 30 per cent of Coca-Cola’s sales volumes. Expanding its distribution networks: The company had also decided to expand its retail network by 18 per cent during the financial year 2004-05 taking the total number of retailers to 1.3 million across the country. Other Distribution Strategies: 1) Coca-Cola Cricket 2) Coca-Cola Concerts 3) Coca-Cola Food Mela 4) Coca-Cola Basant Festival 5) Coca-Cola GO-RED 6) Coca-Cola Party in a Park 7) Coca-Cola Shopping Festival 8) Coca-Cola Ramzan Campaign 9) Coca Cola TV Mazza 10) Coca-Cola & Mc Donald's 11) Fanta & Sprite Launched 12) Diet Coke

dharmikmoni

Aug 9, 2014

Good Post, please try to keep posting. I like this topic very much and I will digged this one. Thanks again.

Business-education

May 25, 2015

Coca-cola is leading the market in beverages , strongly followed by Pepsi.Distribution in crucial because delivering right product at a right time is the basic rule in the market. But, I won't tell about distribution because it is already stated , I would like to give information about its advertising strategy. The success of coca cola lies in its advertising because they try to induce the heart of the people. See the ads of coca-cola and you will definitely like it. The ad which is on youtube , not that one which is placed on television. Just believe me and watch ads.you will know everything abut it.

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Sept. 8, 2023 6:00 am ET

Functional Drinks Market Identifying Emerging Market Trends and Opportunities in 2023- The Coca-Cola Company, Nestle, Danone

Global Functional Drinks market study offering the most recent results of our top researchers :

A newest market study has been uploaded to the source of Market Intelligence Data is an in-depth analysis of Functional Drinks Market . This research reports provides insights on current and future industry trends, enabling readers to identify products and services, driving revenue growth and profitability. This research report provides a detailed analysis of all key factors influencing the market on a global and regional scale, including drivers, restraints, threats, challenges, opportunities, and industry-specific trends. Based on discussions with industry experts about market development, consumer demand, sales trends, revenue projections, gross margins, and regional growth, this study makes strategic recommendations. Additionally, the report cites global certainties and assurances along with downstream and upstream analysis of key players. The forecast market information, SWOT analysis, market scenario, and possibility study are the energetic aspects evaluated in this report. The research report presents a 2022 base year and forecasts between 2023 and 2029.

The Functional Drinks market is growing and developing at a CAGR of + 7 % sometime during 2023-2029.

Top Key Companies of the Functional Drinks Market:

The report also provides analysis of the key companies of the industry and their detailed company profiles including The Coca-Cola Company, Nestle, Danone, PepsiCo, Unilever, Campbell Soup, GlaxoSmithKline, Kraft Heinz, Archer Daniels Midland (ADM), The Hain Celestial Group, Fonterra, Uni-President, Del Monte Pacific, Dr. Pepper Snapple Group, JDB Group, RED BULL, Suntory, Rockstar, Monster Energy and others.

Get Full PDF Sample Copy of Report: (Including Full TOC, List of Tables & Figures, Chart:

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(If you have any special requirements, please let us know and we will offer you the report as you want.)

Functional Drinks Market Segmentation:

The Market report is segmented by Type and by Application along with a contemporary analysis pertaining to the current global market scenario, latest trends, and the overall market environment.

The major types of the market are:

Energy Beverages

Functional Fruit and Vegetable Juices

Sports Beverages

Functional Water

The major applications in the market are:

Offline Stores

Online Stores

Global Functional Drinks Market Drivers and Restraints:

Many Consumers are using Functional Drinksas a substitute, the primary factors affecting the demand for Functional Drinksglobally are a rise in consumer demand. Throughout the forecasted period, the demand for a Functional Drinksmarket boosting all over the world. Also, this research report helps to driving business growth.

Restraints:

The Functional Drinksplaying crucial role in Automobile and Transportation industry growing in billions around the world. Especially which area highly growing and which player dominating in this industry to be found in this research report. In some areas of the Automobile and Transportation business, this may reduce the demand.

The base of geography, the world market of Functional Drinks and disruption has segmented as follows :

North America- United States, Canada, and Mexico

Europe-Germany, France, UK, Italy, Spain

South America- Brazil, Colombia, Argentina, and Chile

Asia Pacific includes- Japan, China, South Korea, India, and Southeast Asia

The Functional Drinks report analyses various critical constraints, such as item price, production capacity, profit & loss statistics, and global market-influencing transportation & delivery channels. It also includes examining such important elements such as Functional Drinks market demands, trends, and product developments, various organizations, and global market effect processes.

Strategic points covered in the Functional Drinks market catalog:

Introduction, market driving force product research goals and research scope of the market (2023-2029).

Exclusive summary- Basic data on the market.

The changing impact on market dynamics - global party supplies driving factors, trends, challenges, and opportunities; post-COVID analysis.

Introduction of the market factors, after COVID impact analysis, Porter's five forces, the supply/value chain, market entropy, patent/trademark analysis.

Show 2023-2029 by type, end-user, and region/country.

Assess the leading manufacturers of the Functional Drinks, including their competitive landscape, peer analysis, BCG matrix, and company profile.

Evaluate the market-by-market segments, countries/regions and manufacturers/companies, the revenue share and sales of these companies/companies in these different regions of the main countries/regions (2023-2029).

To be continued...

Please read the reports detailed scope :

Following are chapters in Functional Drinks Market report 2023:

Functional Drinks Market Report Overview : It includes major players of the market covered in the research study, research scope, market segments by type, market segments by application, years considered for the research study, and objectives of the report.

Global Growth Trends : This section focuses on industry trends where market drivers and top market trends are shed light upon. It also provides growth rates of key producers operating in the market. Furthermore, it offers production and capacity analysis where marketing pricing trends, capacity, production, and production value of the market are discussed.

Functional Drinks Market Share by Manufacturers : Here, the report provides details about revenue by manufacturers, production and capacity by manufacturers, price by manufacturers, expansion plans, mergers and acquisitions, and products, market entry dates, distribution, and market areas of key manufacturers.

Functional Drinks Market Size by Type: This section concentrates on product type segments where production value market share, price, and production market share by product type are discussed.

Functional Drinks Market Size by Application : Besides an overview of the market by application, it gives a study on the consumption in the market by application.

Functional Drinks Production by Region : Here, the production value growth rate, production growth rate, import and export, and key players of each regional market are provided.

Functional Drinks Consumption by Region : This section provides information on the consumption in each regional market studied in the report. The consumption is discussed on the basis of country, application, and product type.

Company Profiles : Almost all leading players of the market are profiled in this section. The analysts have provided information about their recent developments in the market, products, revenue, production, business, and company.

Functional Drinks Market Forecast by Production : The production and production value forecasts included in this section are for the market as well as for key regional markets.

Functional Drinks Market Forecast by Consumption : The consumption and consumption value forecasts included in this section are for the market as well as for key regional markets.

Value Chain and Sales Analysis: It deeply analyzes customers, distributors, sales channels, and the value chain of the market.

Key Findings : This section gives a quick look at the important findings of the research study.

Key Questions Answered in the Functional Drinks Market are:

Who are the players in the market?
What are the main drivers, growth/decline factors, and challenges?
How is the industry expected to evolve in the forecast period?
What are the consumption patterns in various regions?
Which product types and areas of application are expected to experience significant demand in the near future?
What factors make the market a good long-term investment?
What strategies are the top firms using to gain market share in mature markets?

Key Offerings:

Industry Size and Revenue Projections for 2023-2028
Industry Dynamics, including Emerging Trends, Growth Drivers, and Investment Opportunities
In-depth Industry Segmentation by Application, Type, and Region
Competitive Analysis, featuring Top Competitors and other Leading Players.

Finally, the Functional Drinks Market report is the believable source for gaining the Market research that will exponentially accelerate your business. The report gives the main origin and economic situation of the project value, benefit, limit, power generation, supply, demand, market development speed and figures. The Functional Drinks industry report also presents a new task SWOT examination, speculation attainability investigation, and venture return investigation.

Reasons to buy Report:

The report offers in depth analysis of the market by providing the definition, application and classifications.

The strategies of each vendor in the market in provided in the report.

The offers comprehensive insights into current industry trends, trend forecast and growth drivers.

The report provides a detailed overview of the vendor landscape, competitive analysis and key market strategies to gain competitive landscape.

Can I modify the scope of the report and customize it to suit my requirements?

Yes. Customized requirements of multi-dimensional, deep-level and high-quality can help our customers precisely grasp market opportunities, effortlessly confront market challenges, properly formulate market strategies and act promptly, thus to win them sufficient time and space for market competition.

Country level market for Functional Drinks market (up to 5)

Profiling and additional market players (up to 5)

up to 40 hours of customization.

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Coca-Cola is evolving its business strategy to become a total beverage company by giving people more of the drinks they want – including low and no-sugar options across a wide array of categories – in more packages sold in more locations.

New Business Strategy to Focus on Choice, Convenience and the Consumer

Coke's way forward, innovating the way we do business.

Coca‑Cola is evolving its business strategy to become a total beverage company by giving people more of the drinks they want –including low and no-sugar options across a wide array of categories –in more packages sold in more locations.

Building a portfolio of “consumer-centric brands” requires shifting focus from what the company wants to sell to what consumers want to buy, explains President and Chief Operating Officer James Quincey, who shared this strategy as part of the company’s vision for future growthtoday at the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton, Fla.

"We need to start by asking, ‘Where are they going?” he said, stressing the need to stay a step ahead of trends and evolving tastes. “Consumers are looking for products that are more natural. At times with less sugar. Sometimes with more benefits.”

Responding to Consumer Demands

Quincey, who has been tapped to become Coke’s CEO in May, said the company’s multifaceted approach to meet changing tastes and needs includes reducing sugar and calories across many brands; offering new drinks that provide health benefits like hydration and nutrition; expanding the availability of smaller, more convenient packages to help people control sugar more easily; and providing clear, easy-to-find calorie information to help people make informed decisions without the guesswork.

Putting the consumer first, Quincey said, starts with rethinking some of the company’s beverage recipes to reduce sugar, and investing to make the next generation of zero-calorie sweeteners. The goal is to give people the low and no-sugar drinks they want without having to give up the great tastes they know and love.

Supporting Lower Sugar

At the same time, The Coca‑Cola Company supports the current recommendations of several leading health authorities, including the World Health Organization (W.H.O.), that people should limit their intake of added sugar to no more than 10 percent of their total daily calorie/energy intake.

“We’ve begun our journey toward that goal,” Quincey said, citing efforts to make low-and no-sugar drinks more visible and easier to find, and bringing more offerings like organic tea, coconut water, dairy, grab-and-go coffee, juices and purified waters to more people in more places.

In 2017, the company will reduce sugar in more than 500 of its drinks around the globe –adding to the 30 percent of more than 3,900 beverages that already fall into the low or no-sugar category.

Building Portfolio Awareness

The company is also investing more of its marketing dollars to build awareness of its low-and no-sugar drinks. For example, the “One Brand” global marketing strategy launched in early-2016 unites all four Trademark Coca‑Cola brands – Coca‑Cola, Coke Zero, Diet Coke/Coca‑Cola Light, and Coca‑Cola Life – in the “Taste the Feeling” creative campaign, underscoring the company’s commitment to offering aCoca‑Colafor all tastes and lifestyles.

'We’re listening carefully and working to ensure that consumers are firmly at the center of our business so we can continue to grow responsibly. If we embrace where the consumer is going, our brands will thrive, and our system will continue to grow.'

"We’re listening carefully and working to ensure that consumers are firmly at the center of our business so we can continue to grow responsibly. If we embrace where the consumer is going, our brands will thrive, and our system will continue to grow." - James Quincey

Another element of the strategy involves smaller, more convenient packaging. Today, about 40 percent of the company’s sparkling brands are available in these packages of 250 mL (8.5 oz.) or less. And mini cans and other smaller packs now account for 15 percent of the company’s sparkling transactions in North America.

Continuing to Be Consumer-Focused

For years, the company has been implementing policies and actions in line with this strategy. In September 2009, Coca‑Cola became the first beverage company to commit to front-of-package calorie labeling globally on nearly all packaging and continues to do so. Additionally, the company is diligently following its longstanding policy not to target advertising to children under age 12 anywhere in the world.

All these proof points, products, programs, and policies –and the company’s futureplans–are grounded in consumer insights.

“We’re listening carefully and working to ensure that consumers are firmly at the center of our business so we can continue to grow responsibly,” Quincey said. “If we embrace where the consumer is going, our brands will thrive, and our system will continue to grow. This is Our Way Forward.”