Delivering Sustainable Growth Brazil Business Unit
Post on 22-Jan-2023
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Key Messages
• We are delivering solid results leveraging on a rich heritage and a strong and balanced portfolio
• Brazilian NARTD market provides multiple opportunities for KO sustained growth over the next decade
• We have a disciplined strategy to continue winning in the future
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1.9 Bn Unit Cases
KO’s 4th Largest Market (7% of Global Volume)
KO Per Capita: 229 8oz. Servings
3.4 Times Larger than Nearest Competitor
Brazil: A Key Market For KO
• Large and developing country
– 8.5 million km²
– ~190 million inhabitants
– ~ US$ 2.0 trillion(1) in GDP
• Solid macroeconomic fundamentals
– GDP growth in 2010: ~7.5%(2) and expected 2011: ~4.4%(2)
– Low inflation expectations: ~5.9% (2)
– Real income gains (around 4% (3) higher than ‘09)
– Better income distribution (GINI index(4) decreasing since ‘98)
– Continued credit expansion
• Stable institutions
– Dilma Rousseff election is a bet for continuity with no major
changes in social/economic policies
– Senate and Congress favoring Dilma’s mandate
• Hosting mega global events – 2014 FIFA World Cup and 2016
Olympic Games
(1)Source: Tendências (2) Source: Boletim Focus (Brazil’s Central Bank’s weekly research) (3) Source: IBGE data Nov’10 (4) GINI index measures the income difference
Coca-Cola Brazil at FY 2010:
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We Hold The Best Position To Compete
Leading positions across NARTD beverage market: 54%(1) NARTD volume share (2010)
POS Presence
~1 MM Category Key Brands Position
Sparkling Soft Drinks
#1
RTD Juices / Juice Drinks
#1
Bottled Water #1
Tea / Mate #1
Flavored Water #2
Sports Drinks #2
Energy Drinks #2
~540K Installed
Coolers
44 Plants
System Investments:
• 2004-2009: US$ 3.6Bn • 2010-2014: US$ 6Bn
+67%
(1)Source: Canadean
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We’ve Been Winning In The Brazilian Market
KO Volume Growth (vs. PY)
2009
+16%
2007 2006
+9%
2005
+11% +4%
Coke TM
+8%
+33%
Juices / Juice Drinks(2)
KO Volume Growth by Category
5-Year CAGR (2005-2010)
(1) 4,17% Estimate (2) Including acquisitions (3)Source: Canadean
2008
+7%
+7%
SSDs Water(2)
+42% +1.7 p.p.(3) NARTD
volume share growth in
2010
KO growing 2.3x faster
than Brazil’s GDP(1)
(05-10 CAGR)
Still Bevs.(2)
+52%
2010
+11%
6 Classified – Highly Restricted
Very Positive 2010 Results Enhanced By Tail Wind
2005 2006 2007 2008 2009 2010
-0.2%
+3.2% +4.0% +5.7%
+7.5% +5.1%
J07
A0
7
J07
O0
7
J08
A0
8
J08
O0
8
J09
A0
9
J09
O0
9
J10
A1
0
J10
Favorable Scenario
IPCA Food & Beverages (%PY) IPCA General (%PY)
Favorable Weather
Temperatures
above average
Higher Consumption Potential • KO price increase = inflation • Salary mass growth > inflation
GDP 2010 Growth Record
IPCA Food & Beverages
Inflation Decreasing
+11% vs. PY driving NARTD volume share gain of 1.7 p.p. (1)
(1)Source: Canadean
KO NARTD Volume
2010 “Tail Wind”
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Strengthened system partnership
Winning In The Brazilian Market
CVD
WATER JVs
SSDs
Restructured strategies leveraging on
segmented approach and Revenue
Growth Management (RGM)
Built mega brands
Executed successful acquisitions
Strengthened our execution capabilities
Established customized business models
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We Have A Disciplined 5 Step Strategy To Continue
Winning In The Future
Grow Sparkling Leadership
Strengthen System
Capability
Grow Sparkling
Leadership
Rapidly Grow Still Beverages
Leverage Global Events
Innovation
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Affordability: Opportunity To Be Captured By
Accelerating Returnables
EMERGING MIDDLE CLASS COMPETITORS
SHOPPER CONSUMER
LOVE:
DAILY:
61%
24%
64%
19%
Low Socio-Economic Level (SEL) teens
have lower levels of consumption
Source: Internal Data (Coca-Cola) / Dec’10
Increase % of income
committed to basic goods
Access to new kinds of
goods
Lower money
availability
$
Greater coordination of B-brands through Afebras
Increasing distribution and household penetration
60% 56% 50%
26% 29% 34%
14% 15% 16%
2004 2007 2011
A/B (High SEL)
C (Mid SEL)
D/E (Low SEL)
Households per Socio-Economic Level (SEL - %)
Entrance of Ajegroup and Industria San Miguel
Source: IBGE ; (1) Estimated
Key for transactions
Grow Sparkling
Leadership
High SELs (AB)
Mid-Low SELs (CDE)
(1)
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BPPO
Shopper Experience
Shopper Promotions
Strategy
Phase 1 Know
Through Affordability
Habit Building Through Recruitment
CC RGB (1)
1.0L or 1.25L
Repurchase Promo
Meals
Phase 2 Accept
Increase Frequency
CC RGB CC RefPet
Through Meals & Recognition
Loyalty Promos linked w/ Meals
CC RGB &
Phase 3 Like
Reinforce & Sustain Frequency
RefPet Flavors
RGB/RP
RGB
Phase 4 Love
Establish “Returnable Attitude”
RefPet Flavors
1.0/1.25L 1.5/2.0L
A Phasing Approach For Returnables Development
1.0/1.25L 1.5/2.0L RGB/RP 1.0/ 1.25L
1.5/ 2.0L
Grow Sparkling
Leadership
(1) RGB = Returnable Glass Bottle
20% – 40% 40% – 60% 60% – 80% HH Penetration 0% – 20%
+ Occasions
Tie with sustainability platform Live Positively
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346 420 540
2008 2009 2010
Targeting Profitable Occasions Through
Single-Serves
Grow Sparkling
Leadership
R$ 0.75 1.00 1.25 1.50 3.00 2.00 2.50
Tailo
red
in
vita
tio
n t
o
dri
nk
Co
ld d
rin
k ex
pe
rie
nce
B
PP
O a
imin
g at
m
agic
pri
ce
Changing habits in high traffic areas
Tailored shopper experience for emerging channel
Adapted to new occasions & categories
Owning the meals occasion
High market investments (cumulative # coolers)
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Growing In Still Beverages
Key priorities 2011 - 2012
• Consolidate and expand Del Valle TM
• Build a national water brand
• Consolidate sport drinks portfolio
• Evolve to a day/night energy solution
• Fully integrate Leão into KO system
• Strengthen still beverages joint
venture growth model
Energy Sports
Tea / Mate Water
Rapidly Grow Still Beverages
Juices
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KO Juice Transition To Del Valle Trademark And
Global Visual Identity System
• New global visual identity system in 2011
• Del Valle & Minute Maid Mais as stand-alone brands
• Implementation of Trademark to leverage
conversion from NRTD juices
• Creation of juice solution for emerging
middle class through launch of Valle Frut
Rapidly Grow Still Beverages
Phase 1 Phase 2 Phase 3
Juices volume share gain in 2010 +6.8 p.p. vs. PY(1) (1)Source: Canadean Note: Juices includes nectars and fruit stills.
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Strengthen System Execution Capabilities
PEOPLE DEVELOPMENT
SYSTEMS, PROCESSES & ROUTINES
Execution Platforms
Strengthen System
Capability
TRACKING (RED)
OPPORTUNITY IDENTIFICATION
SEGMENTATION & LOS DESIGN
TRADE ENGAGEMENT
EXECUTION (RTM)
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Products
Equipment
Packaging
Cooler
Aquarius Fresh
PET 250ml
Consumer Engagement
Accelerate Innovation
Strengthen And Accelerate Innovation Pipeline
• Leveraging global pipeline
• Streamlining internal processes
• Developing new capabilities
Approach w/ Moms
Digital
Powerade
Rack
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Outstanding Event Execution Build Permanent Legacies
Use FIFA WC 2014 to sustainably step-change consumer connection, corporate reputation and business results for KO Brazil
Our Vision For FIFA World Cup 2014 Leverage Global Events
Active Healthy Living
Recycling
On-the-go
Teen recruitment (13-19 years old)
Socio-environmental leadership
Strong presence in high visibility areas
Broad client partnerships
Massive use of FIFA properties
Everyday Football presence
Seamless on-site execution Proactive stakeholder engagement Iconic Football IMC
“Coca-Cola recognized as recycling
leader in Brazil, promoting a
sustainable and massive virtuous
cycle”
“Recruit next teen generation,
stimulating brand love and daily
consumption “habit”
“Triple on-the-go per capita
consumption through a massive and
highly attractive invitation to drink”
“Coca-Cola recognized as a
company that promotes active,
healthy living from high
performance exercise to fun daily
activities”
football IMC
presence
Everyday football
Communities “Coca-Cola fully integrated into the
communities enabling a better
future for low income families”
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