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Transition Year For The Coca-Cola Company as it Accelerates Refranchising Plans

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Transition Year For The Coca-Cola Company as it Accelerates Refranchising Plans

Transition Year For The Coca-Cola Company as it Accelerates Refranchising Plans
February 10
16:15 2016

The Coca-Cola Company has reported a 4% drop in net revenue to $44.294 billion for 2015 while organic revenue grew 4%. Global volume grew by 2% for the full year as the group gained global value share in non-alcoholic ready-to-drink beverages.

Full-year sparkling beverage volume growth was driven by 1% growth in brand Coca-Cola, 3% growth in Sprite and 6% growth in Coca-Cola Zero, partially offset by a 6% decline in Diet Coke/Coke Light. Full-year growth was led by increases of 8% in packaged water, 4% in ready-to-drink tea, 3% in ready-to-drink coffee and 2% in sports drinks.

Muhtar Kent, chairman and chief Executive Officer of The Coca-Cola Company, comments: “In late 2014, we laid out a clear five-point plan to reinvigorate growth and increase profitability. In 2015, a transition year, we delivered on this plan despite an increasingly challenging global macroeconomic environment.”

Following the success of its refranchising moves in North America, the Coca-Cola Company now plans to refranchise 100% of company-owned North American bottling territories by the end of 2017, including all of the cold-fill production facilities. It is also refranchising its bottling operations in China, building on other recent global refranchising initiatives in Europe and Africa.

Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company.

Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company.

“This acceleration of our global refranchising marks a step change in our efforts to refocus The Coca-Cola Company on its core business of building strong, valuable brands and leading a system of strong bottling partners. When this transformation is complete, we will look very different than we do today,” explains Muhtar Kent. “Expanding Coca-Cola bottlers in various regions will grow in terms of revenue, employment and reach as we transition company-owned operations to the franchise system. The Coca-Cola Company will return to its focus as a higher margin, higher return and less capital intensive operation.”

“With the accelerated refranchising plans,” he says, “we will move from a system where about 18% of our volume was produced by company-owned bottlers in 2015 to about 3%.”

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