2023 has passed, and Coca-Cola's growth continues.
The latest financial report shows that the company achieved revenue of 108 in Q4US$4.9 billion, up 7%; Operating profit 22US$7.3 billion, up 10%; Earnings per share were 0$49, an increase of 10%. For the full year of 2023, its revenue increased by 6% to 457$5.4 billion, operating profit increased 4% to 113$1.1 billion, EPS increased 8% to 2$69.
Industry changes, tuyere rotation, profitability is always the foundation of the company's long-term survival. As a global leader in soft drinks, The Coca-Cola Company's success is driven by the context of the times, as well as the company's efforts in product design, business model selection, branding, globalization and diversification. Compared with the slowdown in growth, business layoffs, and layoffs of some companies, Coca-Cola's resilience can be said to be further revealed.
What is worth it is, what does it do right, and what leverages the continuous growth of performance?
In the latest Coca-Cola financial report, there are still a lot of "appearances" in China.
In terms of best-selling sales, global single-box sales increased by 2%; In Asia Pacific, sales per case increased by 2 percent, mainly driven by growth in China and India, while in the beverage category, growth in fruit juices, dairy, plant-based beverages and flavoured soft drinks was driven by growth.
In terms of beverages, sales of carbonated beverages increased by 2% in both the fourth quarter and the full year, mainly driven by growth in Latin America and Asia-Pacific. Sales of fruit juices, dairy products and plant-based beverages increased 6% in the quarter and 2% for the full year, mainly driven by growth in Minute Maid Oranges in China. Bottled water, sports drinks, coffee and tea sales were flat in the fourth quarter and up 1% for the year, with coffee sales up 3% for the year, driven by strong growth in Costa Coffee in China and the UK.
Against the backdrop of slowing economic growth, the beverage industry clearly shows the potential for "cycle crossing". According to the "2023-2028 Analysis Report on the Status Quo and Development Investment Prospects of China's Beverage Industry", it is expected that the retail sales of China's non-alcoholic beverage industry will exceed 1.7 trillion yuan in 2023. The total market for non-alcoholic beverages is expected to grow at a market size of around 8With a compound annual growth rate of 5%, it will reach 2,379.3 billion yuan in 2027.
Naturally, the Coca-Cola Company will not miss this dividend. On the one hand, it focuses on local consumer demand, focuses on the development of core categories, and stimulates the vitality of the beverage market. On the other hand, we will increase the layout of the ** chain to drive sustainable growth.
Talking about the Chinese market, Zhan Kunjie, chairman and CEO of Coca-Cola, said bluntly at the earnings conference, "2023 has started strongly, and our investment during the Spring Festival of the Year of the Rabbit has enabled us to achieve outstanding market performance in the first quarter. This year, we are once again investing heavily in Chinese New Year. We will continue to invest, not only to capitalize on major festivals such as the Chinese New Year this year, but also to restore the growth momentum of carbonated beverages, focusing on revenue growth management and execution opportunities." ”
According to Coca-Cola's 2024 guidance, it expects full-year 2024 organic revenue growth of 6%-7% and EPS growth of 4%-5%.
For more than 100 years, Coca-Cola has always been at the forefront of communication, occupying, breaking through and sinking in various circles. It has miraculously stood out from the subdivision track and successfully aroused the coveted by users around the world. As the single-product track becomes more and more crowded, Coca-Cola's growth strategy is to "grow bigger and deeper": focus on core categories under the efforts of multiple brands, and innovate product portfolios to meet diverse needs.
Caijing" Xin** noted that in the past few years, Coca-Cola has innovated in many categories such as flavored sodas, juices, coffee and tea, and [Sprite] has launched new sugar-free products and enhanced brand recognition with the help of a new visual image. From 2023 to the present, its classic brand has made efforts in product innovation, brand building, interactive marketing and other fields to build a strong correlation between the brand and the festival scene, play the role of an emotional bond, and strengthen marketing and channel competition.
For example, during the Spring Festival of the Year of the Dragon, the flagship brand [Coca-Cola] joined hands with cutting-edge paper-cutting artist Chen Fanwan to launch the New Year limited edition packaging product "Year of the Dragon Limited Can", which integrates the traditional cultural characteristics of paper-cutting art into the product packaging design. With the help of a series of creative consumer activities for the Year of the Dragon, Coca-Cola invited thousands of Chinese families to share their stories of "reunion", recording simple, authentic and refreshing joy for consumers.
In addition, Coca-Cola's global creative platform "Joy and Boundless" will launch two limited products in 2023 - "Hero Debut" inspired by the "League of Legends" game and the first "Next 3000 Years" jointly created by artificial intelligence, continuously extending the boundaries of product creativity. In July 2023, Sprite launched a 1982 lemonade in the Chinese market, responding to the "82-year-old Sprite" culture that is hotly discussed by the new generation of consumers, and enhancing interaction with consumers.
Recently, a number of the company's products, including [Coca-Cola] Zero soda, [Fanta] orange soda, [Chun Tea House] sugar-free tea drink and [Costa] coffee coffee drink in the plant coffee house, have been selected into the list of "Landmark Foods for Improving Nutrition and Health Characteristics in the Food Industry" certified by the China Food Industry Association. At the same time, Coca-Cola China was selected into the "Food Industry Nutrition and Health Action Management System List" and became the "Strategic Partner of the National Food Industry Nutrition and Health Action".
Today, Coca-Cola needs to achieve greater commercial value and take into account more social value. In addition to marketing, how to provide more consumers with rich and high-quality products at the right time and place with efficient production efficiency is another key to meet market demand and achieve sales performance.
In the past year, Coca-Cola China has not given up on improving the quality and efficiency of production capacity, while increasing investment in setting up factories and expanding production lines to meet new challenges with higher production capacity and efficiency. On the one hand, we use data to open up the front and back ends of the industrial chain, improve the flexibility of the first chain with the help of digitalization, reduce inventory pressure, and better serve the sales link.
In terms of COFCO Coca-Cola, the relocation and new project of COFCO Coca-Cola Shaanxi Company will start in Xi'an Economic and Technological Development Zone in January 2024, with a planned area of 170 acres and a plant construction area of about 790,000 square meters, with a total investment of 1 billion yuan. The new plant plans to lay out 8 beverage production lines and 1 syrup production line, with a maximum design capacity of about 1.1 million tons, which is expected to be put into operation in September 2025. At the same time, the production management of the new plant will be fully digitally upgraded, helping to improve the quality and speed of production capacity, and provide high-quality beverage products for local consumers.
In September 2023, Swire Coca-Cola Suzhou, with a total investment of RMB 2 billion, officially broke ground in the Kunshan Development Zone, and is scheduled to be completed and put into operation by the end of 2025. In May 2023, the Guangdong Swire Coca-Cola Greater Bay Area Smart Green Production Base Project was signed and settled in Huangpu District, Guangzhou, with a total investment of about 1.2 billion yuan and an area of about 12850,000 square meters, with an annual production capacity of about 660,000 tons. Swire Coca-Cola's total investment in Chinese mainland is expected to exceed RMB12 billion over the next decade.
At the same time, Swire Coca-Cola is also accelerating its digital transformation. In December 2023, Swire Coca-Cola and Siemens renewed their digital strategic cooperation agreement. In the past two years, the manufacturing information system (MIS) jointly developed by the two parties has been applied to 25 factories and nearly 71 production lines of Swire Coca-Cola in China. Since its launch, the net production efficiency of the MIS production line has increased by about 42%。
Looking back, it is the product side that focuses on core categories, the marketing side grasps the trendy, and the first chain-side digital intelligence drives the development of the green chain, which has helped Coca-Cola China achieve butterfly changes again and again. It is still deepening these moats for greater growth.