Coca Cola

1

ShopperInsights

Market Evaluation

Pricing &PromotionAnalysis

Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment

AdvancedMerchandising

FMI May 6-8, 2007

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Source: The World According to Shoppers, 2004

A Number Of Forces, Trends, and Pressures Are Affecting Shopper Behavior

As consumers grow more time-starved, we are seeing changes in their preferences and behaviors

Almost two thirds of consumers do not feel there is enough time in the day to meet all their commitments, with 36% feeling strongly that this is true.*

Americans are spending more than three times as much time sitting in traffic than they did 20 years ago. The average delay per person per year is 36 hours now vs. 11 hours in 1982.**

*Source: Mintel/TechnoMetrica**Source: Texas Transportation Institute, Urban Mobility Study 2001

Shopper Insights

3

4.4

4.4

4.1

4.1

3.8

3.1

2.9

4.3

4.3

4.2

4.2

1 2 3 4 5Not Important Important

Good customer service

Products always in stock

Fast checkout

Easy to shop

Broad product assortment

Convenient location

Special deals or promotions

Best selection of products for me

Quality name brand products

Store brand/private label items

First to offer new products

Source: Meyers Research and MVI, August 2004

Important considerations for shoppers when deciding where Important considerations for shoppers when deciding where to shopto shop

How are these lifestyle changes affecting the shopper’s behavior?

““Shop-Ability” Impacts Where Consumers Decide to Shop-Ability” Impacts Where Consumers Decide to ShopShop

““Shop-Ability” Impacts Where Consumers Decide to Shop-Ability” Impacts Where Consumers Decide to ShopShop

Shopper Insights

4

60% of supermarket purchase decisions are completely unplanned (i.e. category not in consideration set in advance of trip)

Higher Shop-abilityGreater Potential to Drive

Unplanned Purchases=

Shopable stores are better positioned to capture unplanned purchases

Source:POPAI Consumer Buying Habits Study, MVI

Shop-ability = “Anything that enables the shopper to make a faster, easier, better decision”

Shopper Insights

5

Evolving shopperneed states…

Trends driving shoppingpatterns among consumers…

Care for Family

Smart budget shopping

Efficient stock-up

Discovery

Bargain Hunting

Specific Item

Reluctance

Grab & Go

Immediate Consumption

Care for Family

Care for Family

MoneyMoney

TimeTime

PersonalPersonal

Consumer Pressures are Forcing Shopper Needs to Evolve

• Savings (good price) Important• Store Hopping is Common• Many are Paycheck-driven

• One-stop Shopping• Less Tolerant of Delays• Fast Checkout is a Must

• Personal Indulgences• “Take Care of Me”• Like/Dislike Shopping

• More Focus on Family• Trust Matters• Shopping Provides a Connection Point

Fill-InFill-In

Quick MissionQuick Mission

Traditional Shopping Need States

27%

16%

18%

9%

10%

9%

4%

5%

2%

% of Grocery Spend

Source: “The World According to Shoppers”

Advanced Shopper Insights

Stock-upStock-up

Shopper Insights

6

Need States – Large Dollar Rings

$110Average

spending per shopping trip

19%Percentage of

grocery shopping trips

Care for Family

Driven to do the best they can for

their families

“I buy what people ask for and what I think will please them, but I always make a decision that ensures it’s

good for them.”

Efficient Stock-Up

Laying in supplies to minimize the number of times they have to go to

the store

“I don’t like to grocery shop, so on my major

trips, I buy everything I can

$95

13%

Smart Budget- Shopping

Want to do the right thing for the family, but saving

money is important in their decisions

“I’m laying in supplies for the long term. I want the store to make it easy for

me to find savings.”

$93

15%

Discovery

Explorers hoping to find something new

$90

7%

“I like to browse during my grocery shopping

trips. Every trip is a little different. I look for new ideas, new recipes, new foods—& non-grocery products like clothes.”


Shopper Insights

7

Need States – Medium Dollar Rings

$57

13%

$60

11%

$58

8%

Bargain-HuntingAmong Stores

Specific Item

Reluctance

“I just don’t want to be here. I’d rather have somebody else do

my shopping or go online.”

Focus first and foremost on one or two urgently needed

items

“I need something right away; a specific food, ingredient, prescription medicine, or

alcoholic beverage. If it’s not on the shelf, I’m likely to go to the

next store.”

Don’t want to grocery shop and seek as little involvement

as possible

Look for tactical bargains on specific items as

opposed to overall savings

“I take pride in what I do. I like to tell my friends about the

deals I find.”

Advanced Shopper Insights


Average spending per shopping trip

Percentage of grocery

shopping trips

Shopper Insights

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Small-BasketGrab & Go

Want to get in, grab a short list of items, and get out in a hurry

Need States – Small Dollar Rings

“Bread, milk, bananas, and beer. In and out in 10-minutes. That’s what I’m here

for.”

$41Average spending per shopping trip

9%Percentage of

grocery shopping trips

ImmediateConsumption

“I’m thirsty, I’m hungry, or I need cigarettes.”

Seek to satisfy a craving

$32

5%


Shopper Insights

9

Top 5 Categories Purchased

Dairy (72%)

Produce (70%)

Packaged food (66%)

Frozen food (64%)

Fresh meat (60%)

Snacks/candy/gum (39%)

Non-alcoholic beverage (26%)

Dairy (26%)

Produce (22%)

Frozen Food (21%)

High IndexingProducts

Imported cheese (157)

Fresh fish (163)

Refrigerated prepared food (158)

Fresh baked goods (152)

Non-alcoholic beverage (152)

Fresh prepared food (162)

Cigarettes (143)

Magazines (113)

Two Need States Indexing Highfor Non-Alcoholic Beverages

(%) = Frequency of purchase

(#) = Frequency of purchases in need state/avg. frequency of purchases across all need states.Source: “The World According to Shoppers”

$32Average spending per shopping trip

5%Percentage of grocery shopping trips

$110

19%

Care for Family Immediate Consumption

Shopper Insights

10

8 Beverage Categories

40 Retail Customers

8 Beverage Categories

40 Retail Customers

7 Channels

50 DMAs across the U.S.

7 Channels

50 DMAs across the U.S.

MethodologyMethodology

SizeSizeOne of the largest One of the largest surveys we have ever surveys we have ever conductedconducted

BreadthBreadthUnprecedented cross Unprecedented cross channel viewchannel view

DepthDepthDeep view of customers Deep view of customers never done beforenever done before

60,000 online respondents, 1,200 in-

store interviews

115,000+ shopping occasions

60,000 online respondents, 1,200 in-

store interviews

115,000+ shopping occasions

Shopper Insights

11

Connecting with the Shoppers’ Needs and Motivation helps Builds Loyalty and Sales

It all begins with the NEEDS of the SHOPPER

CONSUMPTION

Grocery, Clubs, Supercenters,

Drug, CR, Mass; Value

PURCHASE CHOICE

SHOPPING EXPERIENCE

OCCASION BASED

CHANNEL CHOICE

SHOPPING NEED

Shopper Insights

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Cleanliness and neatness of the store

Cleanliness, Selection and Convenience are Very Important in Store Choice

Source: Landmark Study, October 2005

Is close to where I live or work

Freshness of produceand meats

Does not runout of stock of products I want

38%38%

40%40%

22%22%

20%20%

Source: Landmark Shopper

Shopper Insights

13

Health & Wellness Focus is critical Across a Variety of Areas

Green denotes overindex of 120+, red denotes underindex of at least 80

40%44%37%42%40%44%41%40%I would like my favorite brands to provide more nutritional information on their products

40%43%39%43%36%41%42%41%Organic foods are healthier than other foods

43%47%42%45%39%44%44%43%All natural foods are healthier than other foods

47%47%40%58%46%47%53%50%I am very knowledgeable about nutrition

49%52%40%50%45%50%57%53%I buy more fresh foods than packaged foods when I go grocery shopping

38%42%37%41%36%41%38%35%Nutrient-enhanced foods are healthier than other foods

40%39%39%38%40%40%44%39%I and/or another member of my household is on a diet

Health & Wellness

55%57%51%59%58%53%54%56%I and/or another member of my household is taking a prescription medication for a health condition

59%59%57%56%63%76%60%61%I weigh more than I should

24%

34%

Grocery

26%

39%

Club

28%

35%

Total

31%

31%

Conv. Retail*

31%

39%

Drug

24%

32%

SC

32%30%I’m lucky, I don’t have to worry much about what I eat and drink

37%37%Keeping fit is more important to me than to most people

DollarMass

40%44%37%42%40%44%41%40%I would like my favorite brands to provide more nutritional information on their products

40%43%39%43%36%41%42%41%Organic foods are healthier than other foods

43%47%42%45%39%44%44%43%All natural foods are healthier than other foods

47%47%40%58%46%47%53%50%I am very knowledgeable about nutrition

49%52%40%50%45%50%57%53%I buy more fresh foods than packaged foods when I go grocery shopping

38%42%37%41%36%41%38%35%Nutrient-enhanced foods are healthier than other foods

40%39%39%38%40%40%44%39%I and/or another member of my household is on a diet

Health & Wellness

55%57%51%59%58%53%54%56%I and/or another member of my household is taking a prescription medication for a health condition

59%59%57%56%63%76%60%61%I weigh more than I should

24%

34%

Grocery

26%

39%

Club

28%

35%

Total

31%

31%

Conv. Retail*

31%

39%

Drug

24%

32%

SC

32%30%I’m lucky, I don’t have to worry much about what I eat and drink

37%37%Keeping fit is more important to me than to most people

DollarMass

* Excludes trips where only gas was purchasedQ55. For each statement please indicate how much you agree or disagree that the statement describes you and your household.Source: Landmark Shopper Study, October 2005

= over index 120+ = under index of at least 80

25% of Shoppers are Extremely Mindful of Health & Wellness when making choices of foods, beverages, and level of physical activity

Shopper Insights

14

Shoppers are Pressed for Time across all shopping segments

Supermarkets have the opportunity to satisfy time starved grocery shoppers by ensuring high household penetration and high purchase frequency products are in

stock on shelf and display and these categories are easy to shop.

Q55. For each statement please indicate how much you agree or disagree that the statement describes you and your household.Source: Landmark Shopper Study, October 2005


28%31%34%30%24%31%21%23%I don’t have time to make major, stock-up types of shopping trips

36%35%42%38%34%37%33%32%I spend more time away from home than at home

45%46%51%43%42%45%35%43%I usually choose whichever store will be the fastest and easiest for me to get in and out of

Convenience / Time Pressures

27%27%33%26%26%31%25%22%We are so busy that we’re rarely all at home at the same time

55%55%55%54%56%67%55%52%I feel like I never have enough time to get everything done

Grocery Club TotalConv. Retail*DrugSuper-

center DollarMass

28%31%34%30%24%31%21%23%I don’t have time to make major, stock-up types of shopping trips

36%35%42%38%34%37%33%32%I spend more time away from home than at home

45%46%51%43%42%45%35%43%I usually choose whichever store will be the fastest and easiest for me to get in and out of

Convenience / Time Pressures

27%27%33%26%26%31%25%22%We are so busy that we’re rarely all at home at the same time

55%55%55%54%56%67%55%52%I feel like I never have enough time to get everything done

Grocery Club TotalConv. Retail*DrugSuper-

center DollarMass

Shopper Insights

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The Grocery Channel Satisfies a Variety of Functional Needs for Shoppers

Q27. What needs were you trying to satisfy when you went to [store] on this occasion? Source: Landmark Shopper Study, October 2005

Green denotes overindex of 120+, red denotes underindex of at least 80

18%9%51%17%7%7%5%11%To satisfy an immediate hunger, thirst or craving

11%12%1%5%17%10%25%16%To stock up on a wide variety of grocery and household items for future use

17%17%15%20%14%20%19%16%To obtain specific products or brands that I prefer

16%16%8%13%21%21%19%17%To obtain items that other household members wanted or requested

16%18%5%29%10%18%10%22%To pick up specific sale/bargain items that I was aware of

12%6%3%2%16%6%11%25%To obtain items that I needed to prepare and serve a specific meal

32%35%37%40%29%35%22%27%To take care of an immediate need for a specific item or items

16%9%3%3%28%9%25%30%To buy enough food to have on hand at home

30%40%11%26%38%36%34%36%To buy a few items that I or my household had run out of

39%42%22%33%49%36%50%49%To replenish items that I was low on or out of

Group TotalDollar

Conv. Retail*Drug

Super-centerMassClubGroceryFunctional Needs

18%9%51%17%7%7%5%11%To satisfy an immediate hunger, thirst or craving

11%12%1%5%17%10%25%16%To stock up on a wide variety of grocery and household items for future use

17%17%15%20%14%20%19%16%To obtain specific products or brands that I prefer

16%16%8%13%21%21%19%17%To obtain items that other household members wanted or requested

16%18%5%29%10%18%10%22%To pick up specific sale/bargain items that I was aware of

12%6%3%2%16%6%11%25%To obtain items that I needed to prepare and serve a specific meal

32%35%37%40%29%35%22%27%To take care of an immediate need for a specific item or items

16%9%3%3%28%9%25%30%To buy enough food to have on hand at home

30%40%11%26%38%36%34%36%To buy a few items that I or my household had run out of

39%42%22%33%49%36%50%49%To replenish items that I was low on or out of

Group TotalDollar

Conv. Retail*Drug

Super-centerMassClubGroceryFunctional Needs

* Excludes trips where only gas was purchased = over index 120+ = under index of at least 80

Shopper Insights

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Beverages are Staples on the Heavy Basket Shopper Trips

Q33a: Which of the following types of non-alcoholic beverages did you buy on this shopping trip Source: Landmark Shopper Study, October 2005

• Light Grocery Trip = $1 to $40 (roughly 50% of Grocery trips) • Medium Grocery Trip = $41 to $84 (roughly 30% of Grocery trips) • Heavy Grocery Trip = $85 and higher (roughly 20% of Grocery trips)

Incidence Index for Beverage Purchases on Light, Medium and Heavy Shopping Trips

Light Grocery

Trips

Medium Grocery

Trips

Heavy Grocery

Trips

Carbonated Soft Drinks or Sodas 67 116 156

Juices, Juice drinks, Fruit Smoothie 61 113 178

Bottled Water or Flavored Water 56 125 194

Sports Drinks or Fitness Water 50 100 183

Yogurt Drink 50 125 225

RTD Tea (not hot) 50 100 175

Flavored or Fortified Milk or Milk Drink 69 108 154

Energy Drinks 50 150 250

RTD Coffee (not hot) 50 150 250

Meal Replacement Beverages 100 200 300

Any Beverage 79 113 131

No Beverages 142 73 36

Shopper Insights


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• Convenience Retail Shopper Behavior Study

• Display Effectiveness Studies

• Display Mix Study – Supermarkets

• CSD Ad Feature Optimization Analysis

• Out-of-Stock Study Supermarkets

• Beverage Consumption Purchase Cycle Learnings

• Home Meal Replacement Study

• Cross Category Shelf Space Comparison

• Role of the CSD Category in Supermarkets

• Beverage Market Structure Study

• Coca-Cola Retailing Research Council Studies

Coca-Cola leads in Insights and Research used to Understand the Shopper, Industry and Category

• ACN Channel Blurring

• Grocery SuperStudy

• Convenience SuperStudy

• Center-Store Re-invention

• Store Optimization Research

• Landmark Study

• RFID Shopper Insights

• Shared Ad Analysis

Shopper Insights

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Insights to ActionShopper Insights

ActionsActionsInsightsInsights

Retailer focus on “shop-ability” Retailer focus on “shop-ability” will help attract and maintain loyal will help attract and maintain loyal shoppers.shoppers.

As consumers grow more time-As consumers grow more time-starved, we are seeing changes in starved, we are seeing changes in their preferences and behaviors.their preferences and behaviors.

Utilize in-store messaging to Utilize in-store messaging to help consumers effectively help consumers effectively navigate categories and store.navigate categories and store.

Cleanliness, Selection andCleanliness, Selection and Convenience are very Convenience are very important in Store Choice.important in Store Choice.

Shoppers feel strongly that there Shoppers feel strongly that there is not enough time in the day to is not enough time in the day to meet all their commitments.meet all their commitments.

Emphasize perimeter selections Emphasize perimeter selections and fast checkouts.and fast checkouts.

Shopper Insights

19

ShopperInsights

Market Evaluation


Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment


20

Clear SegmentsClear Segments

CSD MILK

BEER

JUICE

POWDERED DRINKS

INSTANT COFFEE

TEATreat, Fun

Nutrition Relax

Perk Up

Social Reward

Cheap for Kids

Breakfast

19841984

Now - Many New Now - Many New “Categories” and “Categories” and

Further Further SegmentingSegmenting

BEER

Spirits

Diet

MILKReg.

JUICEJuice

Drinks

Bottled

Water

Flavored Milk

Energy Drinks

Sports

Drinks

Mixers

Tap Water

Purified Water

INSTANT COFFEE

Herbal

Teas

Café

Coffee

Flavored

Coffees

20072007

Flavored

Sparkling Water

Diet Flavored

Mineral Water

Yogurt

Drinks

Premium

Wine

TEAFruit Teas

Fresh

Coffee

CSD Regular

ImportedLightImportedLight

Soy D

rinks

Powdered Drinks

2% Skim

Consumers Have More Beverage Choices Than Ever Before

CategoryInsights

21

Share Of Stomach – Total U.S.

Reflects consumption rates and importance of categories

Source: Beverage Digest Fact Book 2007, BD/Maxwell

CSD 27.9 (-.4)

Tea 3.9 (+.1)Juices 4.4 (-.3)

Bottled Water 11.5 (+.8)

Coffee 8.9 (-.1)

Milk 10.7 (-.3)

Beer 11.9 (+.2)

Sports Drinks / Energy 2.6 (+.3)Wine 1.3 (+.1)

Tap Water 14.8 (-.5)

Share (Share chg. vs. Prior)

CategoryInsights

155 Total Annual Gallons per Person = 54oz. Per Day

22

CategoryInsights

CSD 56.5 (-0.7%)

The Size and Value of the Nonalcoholic Beverage Category in all measured channels

is growing >$2.3B +6.0%Category Value (Dollar) Share / Dollar % Change

Source: Nielsen All Measured Channels Total US 12 months ending 3/31/2007

Sports Drinks 10.0 (+6.8%)

Single Serve Water 14.7 (+14.1%)

Energy Drinks 8.5 (+30.3%)

RTD Tea Bottle/Can 4.3 (+19.6%)RTD Coffee 1.5 (+14.4%)

Juice & Drinks 4.4 (-1.4%)

Total Nonalcoholic Beverages = $39B, of which $22B is CSD

23

The Beverage Category is very Important: More Consumers say they drink CSDs Daily or

Weekly than any other non-tap Water Beverage

1.4%

1.5%

3.8%

4.3%

11.7%

21.7%

18.5%

23.7%

45.3%

38.7%

10.7%

14.9%

8.9%

23.2%

19.2%

8.5%

20.5%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Packaged RTD Coffee

Energy Drinks

Packaged RTD Cold Tea

Sports Drinks

Freshly Prepared Cold Tea

Packaged Water Multi-Serve

Any 100% Fruit Juice

Packaged Water Single-Serve

Tap Water

CSD

Daily

Weekly

Monthly

Less Than Monthly

Source: USA BevCAT 2005 Survey

Beverage Category Consumption Frequency

CategoryInsights

24

Carbonated Soft Drinks Total U.S.Corporate Share and Brand RankingsRetail / Fountain / Vending Channels

Source: Beverage Digest Fact Book 2007Includes Retail, Fountain and Vending Channels

CategoryInsights

Coca-Cola

Pepsi-Cola

Dr Pepper / CadburyCott

National Beverage

All Other

Rank Brand 2006

Share

1 Coca-Cola Classic 17.3

2 Pepsi-Cola 11.0

3 diet Coke 9.8

4 Mt. Dew 6.6

5 Diet Pepsi 6.0

6 Dr Pepper 5.8

7 Sprite 5.7

8 Fanta 1.8

9 Diet Mt. Dew 1.5

10 Diet Dr.Pepper 1.5

Corporate Share

25

The Soft Drink Category is very important to Shoppers: In addition to high buying rate, Soft Drinks Purchase Frequency ranks second only

to Bread

• Annually, shoppers spend 51% more dollars on Soft Drinks than on any other top 10 center store category - 28% of the Shopper trips include Soft Drinks.

• Bread is the only center store category that surpasses Soft Drinks purchase frequency.

$41.38

$29.35 $28.97

$46.71

$72.17

$26.85$29.54

$22.11$26.18

$58.01

21

79

85 71418

810

7

Soft Drinks Bread &Baked Goods

Cookies CrackersRTE CerealSnacks CandyShelf StableJuice

SoupBottled Water Coffee

Buying Rate ($) Purchase Frequency

$109.65

Buying Rate = Annual Category $ per Household.Purchase Frequency = Average number of shopping trips (purchase occasions) on which the Category was purchased.Penetration = % of Households Buying the Category at least once per year in any outlet.Incidence = % of ALL trips made by all shoppers that include a purchase of the item/category

Source: Nielsen Homescan TOTAL U.S. - TOTAL GROCERY $2MM- 52 WEEKS ENDING 12/31/06

Incidence:

HH Penetration:

CategoryInsights

26

Nonalcoholic Beverage Categories can be grouped into four Consumer Need

States

Performance Beverages

FunctionalFunctional

CSDs and Refreshing Alternatives

Convenient RefreshmentConvenient Refreshment

“Enjoyable Refreshment” CSDs

“Healthy Refreshment”Fruit Drinks (<10% Juice)

“Versatile Refreshment”RTD Teas

“Refreshing Alternatives”

Shelf Stable Juices & Drinks (> 10% Juice)

Sports Drinks

Sports Hydration

Energy Drinks

Water

HydrationHydrationOn-the-Go

Single-Serve Water:

At HomeGallons

Enhanced SparklingPurified Spring Imported

Juice/Drink Shelf Stable

Health & WellnessHealth & Wellness

Youth

Family

Adult

Shelf Stable Juices & Drinks (>10% Juice)

CategoryInsights

27

Clear Organization and Messaging helps Drive Shopper Conversion within the Need States

CSDsCSDs

WaterWater PerformancPerformance e

BeveragesBeverages

Convenient RefreshmentConvenient Refreshment

HydrationHydration FunctionalFunctional

“Navigating the store and simply finding the desired product easily becomes a more important consideration” - MVI

Sports Drinks, Sports Hydration, and Energy Drinks

Purified, Spring, Imported, and

Enhanced Sparkling

Juice / Juice Drink

Health & Wellness

Shelf Stable Juices & Drinks (>10% Juice)

CategoryInsights

28

Enjoyment Today Feel Good Today Feel Good Tomorrow

Hunger&

Digestion

Sensory Pleasure &

FoodEnhancement

Having a Good Time

Confidence &

Individuality

Energy / Stimulation Active

ReplenishmentMental

Renewal

Health, Beauty & Nutrition

Comfort & Relaxation

Routine Refreshment

Po

we

rO

pp

ortu

nity

Wh

ite S

pa

ce

Top Coca-Cola Brands in each need state

Coca-Cola’s Innovation Strategy Is Focused On Meeting Consumption Need States Of Your

Consumers

CategoryInsights

29

Insights to ActionCategory Insights


Armed with Advanced Shopper Armed with Advanced Shopper Insights, Retailers can evolve with Insights, Retailers can evolve with Consumers.Consumers.

Consumer need states and Consumer need states and occasions drive beverage tastes, occasions drive beverage tastes, preferences and consumption.preferences and consumption.

Non-Alcoholic Beverages can be Non-Alcoholic Beverages can be organized intoorganized intoConsumer Need States.Consumer Need States.

Each beverage need state is Each beverage need state is unique, serving different unique, serving different consumer needs.consumer needs.

Clear messaging provides Clear messaging provides navigation, information and navigation, information and drives Shopper Conversion.drives Shopper Conversion.

Consumer needs are evolving Consumer needs are evolving with more beverage choices with more beverage choices than ever before.than ever before.

CategoryInsights

30

ShopperInsights

Market Evaluation


Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment


31

As Many Retailers Focus On Perimeter Categories In Their Efforts To Differentiate, Total Labor Costs Will Increase Even More

• “The total dollar value of labor costs for the perimeter can nearly triple those of center store items, driving down margins.”*

True Profit Margin

Weekly True Profit

Perimeter 4.0% $6,794.58Bakery -38.2% ($4,747.61)Deli & Foodservice 13.0% $3,883.00Floral -17.4% ($804.26)Meat 4.1% $1,894.24Produce 5.4% $2,839.11

True Profit Margin

Weekly True Profit

Center Store 8.1% $31,697.39Grocery 9.3% $15,850.66

CSD 8.8% $1,391.17

*Source: 2005 GMA Center of Store Study; True Profit from WBC SuperStudyTrue Profit = Adjusted Gross Profit - Activity Based Costing

FinancialAnalysis

32

$3.2

$3.7

$3.9

$4.4

$6.0

$6.3

$7.1

$7.2

$8.3

$10.2

$11.6

$11.7

COOKIES

TOTAL BOTTLED WATER

TOTAL ICE CREAM

TOTAL WINE

TOTAL JUICES DRINKS-SHELF STBL

TOTAL CEREAL

TOTAL BEER

TOTAL PREPARED FOODS-FROZEN

TOTAL CHEESE

TOTAL MILK

TOTAL BREAD & BAKED GOODS

TOTAL CARBONATED BEVERAGES

The Coca-Cola System Recognizes that Getting Center Store & Non-Alcoholic

Beverages Right is Essential

Source: Willard Bishop Consulting 2005 Supermarket Retailer Survey & WBC SuperStudy

Adj. Gross Profit $ per Store per Week

$63,983

Cen

ter

Sto

re

Per

imet

er

65% 35%

$118,299

Retail Executives say: “There are too many sales at

take; perishables can’t grow fast enough to overcome center-store

losses”

Retail Executives say: “There are too many sales at

take; perishables can’t grow fast enough to overcome center-store

losses”

Total Retail Dollars (Billions) Top Center Store Dollar Categories

Source: Nielsen Strategic Planner; Supermarkets $2mm+, 52 WE 9/9/06

3 of top 10 center store categories are Non-Alcoholic Beverages

FinancialAnalysis

33

Soft Drinks are an Important Component to “Center Store” Profitability

$3,449$3,539

$2,560

$1,896

$2,314

$1,839 $1,754

$1,472 $1,469

$1,081

Based on Weekly Sales, Soft Drinks rank second in Adjusted Gross Profit.

Source: Bishop Consulting (3) Chain Average Super Study – (Adjusted Gross Profit = GP – Trade & Terms)

Soft Drinks

Bread Cookies&

Crackers

RTECereal

Salty Snacks

Candy ShelfStableJuice

Soup BottledWater

Coffee

To

p T

en

Ce

nte

r S

tore

Ca

teg

ori

es

Center Store Adjusted Gross Profit

Adjusted Gross Profit= Gross Profit + Terms + Trade Dollars

FinancialAnalysis

34

Soft Drinks are One of the Most Productive Categories in “Center Store”

Source:2005 WBC Super Study: *AGMROII:Adjusted Gross Profit (Gross Profit+Terms+Trade dollars) / Avg Inventory $ on Hand

(Adjusted Gross Margin Return on Inventory Investment)

$11.92

$12.59

$17.41

$20.82

$25.81

$27.66

$34.30

$62.48

$63.67

$72.85

Coffee

Candy

Cookies & crackers

Soup

Ready-To-Eat Cereals

Shelf stable juice

Salty snacks

Soft Drinks

Bottled water

Bread

AGMROII Top Ten $ Categories

FinancialAnalysis

35

Insights to ActionFinancial Analysis


Add value to make center store easier Add value to make center store easier to shop with relevant product to shop with relevant product information and convenience features. information and convenience features.

Evaluate store real estate dedicated Evaluate store real estate dedicated to products with high Gross Margin to products with high Gross Margin Return on Investment.Return on Investment.

Leverage the strength of Soft Leverage the strength of Soft Drinks to drive traffic to Center Drinks to drive traffic to Center Store.Store.

“Center Store” contributes significantly to results and is critical to Supermarket Profit.

Source:2005 WBC Super Study:

Soft Drinks are an Important Component to “Center Store” Profitability.

“Center Store” departments deliver 65% of Adj. Gross Profit.

FinancialAnalysis

36

ShopperInsights

Market Evaluation


Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment


37

Disproportionately important to shoppers to have Soft Drinks in ad

Soft Drink Pricing and Ad Presence Play a Significant Role in the Category’s Ability to

Drive Traffic

Soft Drink brand strength is a much stronger draw for shoppers than for other categories.

Q.1c: Still thinking about your next trip to purchase grocery items, which of the following are reasons you will go to the store for each of the items listed? Source: 2005 Shopper Pricing Perception Study

Top Reasons Why Shoppers Say Specific Categories Draw Them To their Supermarket

% of Shoppers

Need to replenishhome stock

To get the best price

A family memberasked for a specific item

Saw item on salein a newspaper/flyer

Soft Drinks

Dairy (Milk, Eggs, Cheese)

Fresh Meat/Fish

Produce (Fresh Fruit and vegetables)

94

39

32

23

96

27

3

14

88

40

2

14

83

18

17

2

Pricing & PromotionAnalysis

38

12pk Cans

Promotional Planning ModelerRetail Price Package Planning Tool linked to Sales

Forecasting System for developing a Retailer Promotional Plan by Package versus Prior

Data Source: KAEP – Key Account Event Planning


39

Nielsen Based Elasticity ModelRetail Price Package Planning Tool for Evaluating and

Analyzing Elasticity over time

Data Source: Nielsen


40

Nielsen Volume Throw ModelRetail Price Package Planning Tool for Analyzing

Volume lifts by price point across time

Data Source: Nielsen


41

It is not about dividing the pie between . . .

It is about growing the total pie

Expanding Category Sales and Profits are mutually beneficial

Zero Sum Game

Win – Win Game

Manufacturer

RetailerRetailer

Manufacturer


42

Traffic Driving Packages

Traffic Driving Packages

Profit Packages

Profit Packages

Creating Value for the RetailerCreating Value for the Retailer

Together We Can Improve Category Profitability, even in a rising cost

environment

Our Packages Play Various Category Roles in Balancing Traffic Building and Profit Generation


43

Insights to ActionPricing & Promotion Analysis


Utilize Soft Drinks to maintain Utilize Soft Drinks to maintain and grow trips, as well as and grow trips, as well as increase basket size. increase basket size.

Soft Drink pricing is an important factor in driving shoppers to the store.

Set pricing and profitability goals Set pricing and profitability goals and measure performance against and measure performance against them.them.

76% of shoppers believe mid priced Soft Drinks are reflective of total store pricing.

Total Basket Price Image is Closely Aligned with Soft Drink Price Image.

Use tools like RPA to jointly Use tools like RPA to jointly develop Profitable Retail Price develop Profitable Retail Price Package Plans.Package Plans.


44

ShopperInsights

Market Evaluation


Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment


45

The Shopper Segmented Merchandising Opportunity

Shopper Segmented Merchandising:Delivering beverage solutions matched to each store’s DNA

Store A’s “Shopper DNA”

Each store serves a different mix of Shoppers, Occasions & NeedsEach store has a unique DNA

MarketEvaluation

46U.S. Census and BLS, 2003; Yankelovich Monitor, 2005; *GMA Study – Reducing Out of Stocks in the Grocery Channel, 2002

The Shopper Landscape Is Changing

• The shopper base is fragmenting

. . . of U.S. households may now be counted as “Traditional” families – a married couple with at least one child – vs. 44.3% in 1960

. . . of women are now in the workforce

. . .first year that Hispanics will control more disposable income than any other U.S. minority group.

MarketEvaluation

• Given the competitive environment & total shopping trips are down, each retailer has fewer opportunities to reach the shopper, so merchandising needs to match your shoppers when they are in your store

• Fewer Out-Of-Stocks is one of the top 3 items identified by shoppers to improve the shopping experience*

47

What Is Shopper Segmentation?

• Instead of creating one solution for millions of shoppers, develop smaller shopper segments and tailor solutions to these segments–For Beverages, segmentation drives assortment on Shelf, Displays and

Coolers: Right Brand, Right Package, Right Price, Right Occasion in the Right Store

Your Shopper Base Clusters

Impact At Store Level

MarketEvaluation

48

5011Store 4

71277Store 5

72134Store. . .

93142Store 6

15

2

1

Segm

ent …

0

6

5

Segm

ent 3

3

6

5

Segm

ent 2

3Store 3

12Store 2

10Store 1

Segm

ent 1

110K+ Households

. .clustered into

59BeveragePurchase Segments

90,000 stores are scored on 59 Beverage

Segments

Stores with similar scores are grouped together to form

5 Store Clusters

Water

Sports Drinks

Segments are based on beverage Purchase Drivers

and demographicsScoring is based on demographic fit

between store shoppers and beverage Purchase Drivers

Dynamic Clustering:

Grouping together stores with similar

beverage opportunities

Nielsen panel households

Beverage

Segments

SS Juice Energy Tea

Beverage Segments

90,000 stores in Spectra database: Grocery, Mass, Club, Drug, and Dollar formats

SSD

90

,00

0 s

tore

pro

file

s

Utilizing Nielsen’s new Dynamic Clustering Model, Shopper PurchaseSegments are mapped to Store Clusters to drive store-level changes

Shopper Segmented Merchandising Methodology

Storelevel

changes

MarketEvaluation

49

What Are The Coca-ColaBeverage Clusters?

Source: Nielsen Homescan Panel; AO Beverages includes RTD Coffee, Dairy Alternatives, Vegetable Drinks, Powdered Soft Drinks, Drinkable Yogurts, Baby Juice, Non-Carbonated Mixersand Meal Replacement beverages

RuralRural Late adopters of new beverage categoriesLate adopters of new beverage categories• Sparkling Soft Drinks 53% of Beverages—62% of Sparkling is Sparkling Soft Drinks 53% of Beverages—62% of Sparkling is RegularRegular

• High Citrus and 24 pack cansHigh Citrus and 24 pack cans

Mainstream Mainstream Middle-of-the road beverage preferencesMiddle-of-the road beverage preferences• Sparkling Soft Drinks 46% of Beverages—60% of Sparkling is Sparkling Soft Drinks 46% of Beverages—60% of Sparkling is RegularRegular

• Average brands and packagesAverage brands and packages

Urban Urban UpscaleUpscale

Early adopters of new beverage brands & Early adopters of new beverage brands & categoriescategories• Sparkling Soft Drinks 37% of Beverages, 14% is Juice/Juice Sparkling Soft Drinks 37% of Beverages, 14% is Juice/Juice DrinksDrinks

• High Ginger Ale and 2 literHigh Ginger Ale and 2 liter

Suburban Suburban UpscaleUpscale

Strong users of all beverage categoriesStrong users of all beverage categories• Sparkling Soft Drinks 42% of Beverages—46% of Sparkling is Sparkling Soft Drinks 42% of Beverages—46% of Sparkling is DietDiet

• High Diet Cola and TeaHigh Diet Cola and Tea

Urban Urban EthnicEthnic

Strong users of beverages with flavorStrong users of beverages with flavor• Sparkling Soft Drinks 42% of Beverages, 65% of Sparkling is RegularSparkling Soft Drinks 42% of Beverages, 65% of Sparkling is Regular

• High Lemon-Lime and OrangeHigh Lemon-Lime and OrangeShare of Non-Alcoholic Share of Non-Alcoholic

Beverage Retail $Beverage Retail $

Spklg46%

RTD Tea2%

Energy1%

JC/DR SS12%

Water8%

A/O Bev27%

Sports Drks4%

Reg:60%Reg:60%

Diet:40%Diet:40%

Spklg42%

RTD Tea2%

Energy1%

JC/DR SS13%

Water10%

A/O Bev27%

Sports Drks5%

Reg:54%Reg:54%Diet:46%Diet:46%

RTD Tea3%

Spklg37%

Energy2%

JC/DR SS14%

Water10%

A/O Bev29%

Sports Drks5%

Reg: 59%Reg: 59%Diet:41%Diet:41%

RTD Tea2%

Spklg42%

Energy1%

JC/DR SS14%

Water8%

A/O Bev30%

Sports Drks3%

Reg:65%Reg:65%

Diet:35%Diet:35%

Spklg53%

Energy1%

JC/DR SS11%

Water7%

A/O Bev22%

Sports Drks4%

RTD Tea2%

Reg:62%Reg:62%

Diet:38%Diet:38%

MarketEvaluation

50

Deliver “Store Level” Merchandising and Marketing Solutions

RightBrands

RightPackages

RightOccasion

sUrgent Items

HH Stock-up

Speedy Fill-in

JIT Meals HH Stock-up

Everyday Savings

RightBrands

RightPackages

RightOccasion

s

How Can Beverage Assortment Differ by Segment?

MarketEvaluation

51

Flavor EmphasisFlavor Emphasis

RuralRural

Diet Sparkling Diet Sparkling EmphasisEmphasis

Regular Sparkling Regular Sparkling EmphasisEmphasis

13%13%11%11%17%17%28%28%31%31%

Urban EthnicUrban EthnicUrban UpscaleUrban UpscaleSuburban Suburban UpscaleUpscaleMainstreamMainstream

% o

f %

of

Sto

res

Sto

res

Beverage Emphasis by Cluster In Coca-Cola Section

MarketEvaluation

52

Applying Shopper Segmented Merchandising At Store LevelProcess:Process:

1.1. MapMap beverage clusters to your beverage clusters to your shopper/store segmentsshopper/store segments

2.2. CalibrateCalibrate store list to ensure each store list to ensure eachstore is mapped to the right clusterstore is mapped to the right cluster

3.3. SurveySurvey each store to collect correct Coca-Cola section each store to collect correct Coca-Cola section fixture, cold equipment & rack information and confirm fixture, cold equipment & rack information and confirm store cluster classificationstore cluster classification

4.4. Start assortmentStart assortment work with review of macro work with review of macro merchandising guiding principles for relevant clustersmerchandising guiding principles for relevant clusters

5.5. Develop shelf planogramDevelop shelf planogram for each store utilizing store for each store utilizing store level sales data & merchandising guiding principleslevel sales data & merchandising guiding principles

6.6. Develop Marketing & MessagingDevelop Marketing & Messaging that connects with your that connects with your Shoppers to drive Profitable Growth, in Beverages and Shoppers to drive Profitable Growth, in Beverages and Cross CategoryCross Category

MarketEvaluation

53

Coca-Cola Experience Shows Shopper Segmented Merchandising Drives Results

• Proven success in Latin America: +8.5% in Coca-Cola Sales

– SKU rationalization by cluster

– New SKU launches to meet shopper needs

– Pricing decisions

– Planogram resets by shopper cluster

• Initial test results in the U.S. very positive

– Tienda (Hispanic) small store program in LA: +23% sales growth

– Denver market large format resets based on shopper clusters: +5.8% sales growth

– Shopper Segmentation of Enviga brand launch: Target key shopper segments and stores for the brand introduction

LaunchedNew

Package to Target

Consumer+10.6% !

Activated Convenie

nce Package

+13.1% !

MarketEvaluation

54

Insights to ActionMarket Evaluation


Convert Shopper knowledge into Convert Shopper knowledge into information in action, information focused information in action, information focused on results (i.e., Store tailored planograms on results (i.e., Store tailored planograms to maximize sales and reduce out of to maximize sales and reduce out of stocks).stocks).

Each store has a unique DNA Each store has a unique DNA (Shoppers, Occasions & Needs).(Shoppers, Occasions & Needs).

Extensive shopper research & Extensive shopper research & insights drive store level insights drive store level assortment changes. assortment changes.

MarketEvaluation

Segment shoppers based on Segment shoppers based on their beverage purchases with their beverage purchases with five actionable store clusters.five actionable store clusters.

Segment shoppers in a way that Segment shoppers in a way that would lead to meaningful & would lead to meaningful & actionable changes at a store actionable changes at a store level.level.

Develop smaller shopper segments and Develop smaller shopper segments and tailor solutions to these segments. tailor solutions to these segments. Implement merchandising solutions that Implement merchandising solutions that reflect these differences. reflect these differences.

55

ShopperInsights

Market Evaluation


Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment


56

Supermarket visits are focused on today’s needs

Source: 2005 Coca-Cola RFID PathTracker StudyNote: Visuals do not represent only traffic pattern by visit segment. Visuals represent examples of types of visits.

20 Minute+ Trips (42% of all visits)

88% of these trips visit more than 1/4 of the store

58% of Trips Are

Less Than 20 Minutes

10-20 Minute Trips (21% of all visits)

28% of these trips visit more than 1/4 of the store

<10 Minute Trips (37% of all visits)

1% of these trips visit more than 1/4 of the Store


57

Rear endcaps receive more shopper traffic than front endcaps

Products that are in the gondola will receive more shopper exposure if they are positioned towards the back

Traffic flow in most aisles (including CSD aisle)

tends to run back to front, with shoppers buying

mostly on their left.

Implication: Shoppers spend a significant amount of time in the back perimeter, shopping aisles from back to front.

Source: 2005 Supermarket RFID Study

Shoppers shop in a dominant, counter-clockwise pattern, shopping aisles from back

to front


58

• Hot Spots: Mostly on the perimeter and a few center of store aisles leading to the checkouts: produce, meat, dairy and frozen food

• Dead Zones: Much of the center of store has light traffic

Shopper Density Map

Implication: The front and first quadrant of the store offer the greatest number of shopper exposures for messaging & displays

High Density

Low Density

The earliest part of the trip provides exposure to the most shoppers

Source: 2005 Supermarket RFID Study


59

Early Progression

Shoppers

Total Store Shoppers

Quicker Decision Shoppers

CSD In-store merchandising efforts should align with shopper behavior and motivations

Early Progression Shoppers: Generate Excitement Message to the shopper’s needs. Cross-promote with center store

or higher margin perimeter categories.

Showcase new products and variety (brand & pkg.).

Total Store Shoppers: Cross-promote (e.g. tie-in center

store categories). Drive new product awareness. Showcase variety (brand & pkg.). Message to the shopper’s needs. Improve shopper navigation. Provide product information.

Quicker Decision Shoppers: Merchandise high frequency items to

make them easy to find and purchase. Cross-merchandise items frequently

purchased in combination. Communicate promotional information

(e.g. hot pricing) to capture unplanned purchases.

Inspire the impulse purchase. Emphasize convenience.


60

Zone 1: Early Progression

Shoppers

Illustrative Opportunities: Generate excitement & awareness

- Key promotions

- “New news” Engage the shopper early

Characteristics of location:

Shopper Traffic: Very High

Decision-Making Time: None-Fast

Shopper Trip Types: Quick-Long

Stage in Trip Progression: Very Early

Targeting Early Progression Shoppers:Applying Insights to Early Displays


61

Illustrative Opportunities: Message to the shopper’s needs Cross-promote with center store or higher

margin perimeter categories Showcase new products and variety

(brand & pkg.) Communicate information (e.g. product

benefits or details)


Shopper Traffic: High

Decision-Making Time: Slow

Shopper Trip Types: Medium & Long

Stage in Trip Progression: Early

Permanent/Semi-Permanent Merchandising

Targeting Early Progression Shoppers:Applying Insights to Secondary Locations

Zone 1: Early Progression

Shoppers


62

Zone 2: Quicker Trip Shoppers


Shopper Traffic: High

Decision-Making Time: Fast

Shopper Trip Types: Quick-Medium

Stage in Trip Progression: Late

Illustrative Opportunities: Merchandise high frequency items to make

them easy to find and purchase Cross-merchandise items frequently

purchased in combination Communicate promotional information (e.g.

hot pricing) to capture unplanned purchases Emphasize convenience benefits of

packages

Connecting with Quicker Decision Shoppers:Applying Insights to Front Endcaps


63

Zone 2: Quicker Trip Shoppers Temporary Cooler Shrouds

IC3 Call-to-Action Messaging


Shopper Traffic: Very High

Decision-Making Time: Very Fast

Shopper Trip Types: Quick - Long

Stage in Trip Progression: Very Late

Illustrative Opportunities: Inspire the impulse purchase with call-

to-action messaging & bold imagery Stimulate trial of new products with trial-

sized packages Merchandise to her needs first

Connecting with Quicker Decision Shoppers: Applying Insights to the Checkout


64

Zone 3: Total Store Shoppers


Shopper Traffic: High - Medium

Decision-Making Time: Med. Slow

Shopper Trip Types: Medium - Long

Stage in Trip Progression: Early - Late Middle

Endcap

Illustrative Opportunities: Cross-promote (e.g. tie-in center

store categories) Drive new product awareness Showcase variety (brand & pkg.) Message to the shopper’s needs

Connecting with Total Store Shoppers:Applying Insights to Rear Endcaps


65

Zone 3: Total Store Shoppers


Shopper Traffic: Low-Medium

Decision-Making Time: Med. Slow–Medium

Shopper Trip Types: Medium-Long

Stage in Trip Progression: Late Middle-Late

Illustrative Opportunities: Improve shopper navigation Provide product information Inspire the shopper to purchase

(HCM-relevant imagery) Connect the shopper with front-

end categories (e.g. IC beverages)

Beverage Landscape Aisle Messaging

Connecting with Total Store Shoppers:Applying Insights to the Center Store


66

Early Progression

Shoppers

Total Store Shoppers

Quicker Decision Shoppers

CSD In-store merchandising efforts should align with shopper behavior and motivations

Early Progression Shoppers: Generate Excitement Message to the shopper’s needs. Cross-promote with center store

or higher margin perimeter categories.

Showcase new products and variety (brand & pkg.).

Total Store Shoppers: Cross-promote (e.g. tie-in center

store categories). Drive new product awareness. Showcase variety (brand & pkg.). Message to the shopper’s needs. Improve shopper navigation. Provide product information.

Quicker Decision Shoppers: Merchandise high frequency items to

make them easy to find and purchase. Cross-merchandise items frequently

purchased in combination. Communicate promotional information

(e.g. hot pricing) to capture unplanned purchases.

Inspire the impulse purchase. Emphasize convenience.


67

• The three most influential factors in a shopper’s purchase decision from a display are: Price, Brand and Variety.

• Two-thirds of shoppers say displays help them to stop and look at different products.

• Shoppers say CSD displays help remind them to shop for that category.• Carbonated soft drinks are the category shoppers claim to purchase most

often when they see it on display.• Shoppers say that they purchase almost half of the soft drinks they buy

from a display.

Shoppers frequently purchase categories when seen on display

Source: Shopper Display Intercept Study 2006: Integrated Research Associates


68

Traditional “New Age” Sections are a Hodge-Podge of DSD Items


69

Redefine Categories Based on Consumer Need States

CSDs and Refreshing Alternatives Juice/Drink Shelf Stable

Water Performance Beverages

Convenient Refreshment Health & Wellness

Hydration Functional

CREATE A “REFRESHMENT CENTER”CSD's and “New Age” SKU’s meet the Convenient Refreshment Need State and should be grouped together

• Redefine the Antiquated “New Age” Category as “Refreshing Alternatives” to Better Meet Consumers Needs for “Healthy” and “Versatile” Refreshment

• Shelve CSDs (“Enjoyable” Refreshment) on One Side of the Aisle and Refreshing Alternatives across from CSDs when possible

• Move Non Carbs from CSD set to Refreshing Alternatives

IMPROVE ORGANIZATION OF WATER CATEGORYGroup items together that meet the Hydration Benefit Need State

• Move Sports Water (e.g. Propel) from Water Aisle into Performance Beverages

• Reallocate space from declining Gallons to fast growing Single Serve

• Segment the Water aisle by Enhanced, Sparkling, Imports, Purified, Spring and Gallons

ENHANCE JUICE & JUICE DRINK CATEGORYGroup items together that meet the Health and WellnessNeed state

• Relocate All Drink Items That Contain 10% or More Juice Content to this Aisle Regardless of Route-to-Market

• Evolve the Consumer Usage Set to Include the Emerging PET Segment Between Aseptics (Youth) and Multi-Serve

CREATE A “PERFORMANCE BEVERAGE” CATEGORYFunctional Benefit Need State has grown in importance and redefining category will help consumers find the products they want and create excitement in the aisle.

• Co-locate All Functional or Performance Beverage Categories Together (Regular Sports Drinks, Sports Hydration, Energy Drinks)

• Shelve Where Sports Drinks Are Currently Located in Your Store


70

Specific Steps to Reorganize Categories to Better Meet Consumers Needs

1.1. Create NEW “Performance Beverages” SetCreate NEW “Performance Beverages” Set1.Move Propel from Water Aisle and create Sports Hydration Segment which includes

PowerAde Option2.Move Energy Drinks from New Age to Performance Beverages

2.2. Move High Velocity Single-Serve Items Currently in New Age to Cold EquipmentMove High Velocity Single-Serve Items Currently in New Age to Cold Equipment3.3. Move RTD Coffee from New Age to Coffee AisleMove RTD Coffee from New Age to Coffee Aisle4.4. Reorganize New Age to Create NEW “Refreshing Alternatives” Section That Reorganize New Age to Create NEW “Refreshing Alternatives” Section That

Includes Fruit Drinks & Teas Previously in CSD SectionIncludes Fruit Drinks & Teas Previously in CSD Sectiona)<10% Fruit Drinks (Healthy Refreshment)b)RTD Teas (Versatile Refreshment)

5.5. Use Vacated CSD Space for Innovation and Highly Productive SKUsUse Vacated CSD Space for Innovation and Highly Productive SKUs

““Performance Beverages”Performance Beverages”in Shelf Stable J/D Aislein Shelf Stable J/D Aisle

““Refreshing Alternatives”Refreshing Alternatives”in Soft Drink Aislein Soft Drink Aisle

Coole

rC

oole

r

Coff

ee

Coff

ee

Secti

oS

ecti

onn

RefreshinRefreshingg

AlternativAlternativeses

AsepticAsepticss

S-S MPsS-S MPs& &

SingleSingleUnitsUnits

Multi-ServeMulti-Serve

PerformancePerformanceBeveragesBeverages

Healthy &Healthy &Versatile Versatile

NCBsNCBs(Fruit Drinks & RTD (Fruit Drinks & RTD

Tea)Tea)

CSDsCSDs

2 3

115544


71

Performance Beverage Benefits

Performance Beverages - Functional Beverages

Segment Sports Drinks Sports Hydration Energy

Pro

du

ct

(s)

Consumed during physical activity during the day or during a light to moderate

workout

Consumed during social or other activities when energy is

desired

Used as a lower calorie alternative drink with added

vitamins and electrolytes during workouts

Consumer Benefits

Retailer Benefits

• Improve shop-ability of the aisle• Sports Drinks, Sports Hydration,

Energy:– Different ingredients– Align like products

• Improve ‘Center Store’ productivity• Differentiate versus competition• Convert shoppers into buyers• Drive excitement into stores• Create and define emerging

categories


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http://easttexas.na.cokecce.com/is/Artwork/powerade/POWERade-Blast-6pk.jpg

72

Products Can Then be Grouped Within this Segmentation

Refreshing Alternatives

Clear segmentation allows the shelf to be organized and easy to shop

For My Family (All Ages)12oz/12pk Cans, Multi-Pack Bottles, 1L-3L

For Me (Teens/Adults)Single- Serve and Multi-Serve Bottles

Pro

du

ct (

s)

Fruit Drinks Teas Fruit Drinks TeasSegment


http://easttexas.na.cokecce.com/is/Artwork/MinuteMaid/Minute-Maid-Light-Raspberry-Passion-500ml-6pk.jpg

73

Segmentation and Productsin the Water Category

Water-Hydration

Clear segmentation allows the shelf to be organized and easy to shop

Single Serve Multi Serve

Segment Enhanced Sparkling Imported Purified Spring Gallons

Pro

du

ct

(s)


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http://images.google.com/imgres?imgurl=http://www2.coca-cola.com/brands/img/brands_left_dasani.jpg&imgrefurl=http://daniel.motime.com/&h=208&w=183&sz=4&tbnid=9u4fENrpfFoJ:&tbnh=98&tbnw=87&start=1&prev=/images%3Fq%3Ddasani%26hl%3Den%26lr%3D%26sa%3DG

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74

Insights to ActionAdvanced Merchandising


Shoppers spend a significant amount Shoppers spend a significant amount of time in the back perimeter, shopping of time in the back perimeter, shopping aisles from back to front.aisles from back to front.

Display new products, Cross-Display new products, Cross-Merchandising category tie-ins, Merchandising category tie-ins, and utilize Promotional messagingand utilize Promotional messaging.

Message to the shopper’s needs and Message to the shopper’s needs and Cross-promote with center store or Cross-promote with center store or higher margin perimeter categories.higher margin perimeter categories.

Engage the shopper early - Engage the shopper early - Merchandise high frequency items to Merchandise high frequency items to make them easy to find and purchase.make them easy to find and purchase.

The First Third of the Supermarket The First Third of the Supermarket Shopping Trip provides exposure to Shopping Trip provides exposure to the most shoppers - Higher Traffic the most shoppers - Higher Traffic and Slower Shop Times.and Slower Shop Times.

Shoppers shop in a dominant, Shoppers shop in a dominant, counter-clockwise pattern, counter-clockwise pattern, shopping aisles from back to front.shopping aisles from back to front.


Traditional “New Age” Sections are a Hodge-Podge of DSD Items.

Redefine Categories Based on Consumer Need States and Segmentation.

75

ShopperInsights

Market Evaluation


Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment


76

Efficient Assortment(Too Many SKUs, Limited Space)(Too Many SKUs, Limited Space)

In-Store Space In Supermarkets Has Not Expanded As Quickly As SKUs

CPG Manufacturers Have Responded With A Record Number Of New SKU(s)

Expansion of Coca-Cola SKU(s)From 1986 to 2006

Impact Of Inventory-to-Sales and Assortment On System Value Chain

EfficientAssortment

77

• Which items drive sales, traffic and profits• Lost opportunities due to not carrying certain

items• Which items represent true variety, not

duplication• Which items are critical to consumer loyalty• Which items bring valuable (high spending,

frequent shopping) consumers to the category• Which items support your mission and category

strategy

Efficient Assortment

(Helps Determine..)(Helps Determine..)

EfficientAssortment

78

Efficient Assortment(Using Efficient Item Assortment Software)(Using Efficient Item Assortment Software)

• EIA Combines industry-standard methodologies for Efficient Assortment–As established by the

Joint Industry Committees on Efficient Consumer Response

• …And JDA’s industry-leading merchandising/software development expertise

Set Market Coverage Level

Confirm/Validate Additions/Deletions/

Retentions

Review and Finalize Assortment

Assortment Quantification

Fit Assortment to Shelf

Gather the Data

Calculate Assortment

Category Management Basics

EfficientAssortment

79

Insights to ActionEfficient Assortment


Assess new products and Assess new products and positioning.positioning.

Brand and Package innovation - Brand and Package innovation - Increasing SKU proliferation.Increasing SKU proliferation.

Perform comprehensive Perform comprehensive analyses & interpretation of analyses & interpretation of category performance.category performance.

Evolving brands - missed sales and Evolving brands - missed sales and revenue opportunity to reach full revenue opportunity to reach full potential. potential.

Initiate and execute efficient Initiate and execute efficient assortment process.assortment process.

Consumer demand for variety may Consumer demand for variety may lead to “Variety Confusion”.lead to “Variety Confusion”.

EfficientAssortment

80

ShopperInsights

Market Evaluation


Financial Analysis

Category Insights

SpaceManagement

EfficientAssortment


81

Allocation of Inventory

Out-of-StocksLost Revenue

for Retailer and Bottler

Creates trial purchaseof competitors’

products

Out-of-Date Product

Excessive CashTied up in Inventory

Quality Assurance Issue

Even Sell DownsMaximizes Cash Flow

Maintains/grows consumer base

SpaceManagement

Inadequate Inventory

Excessive Inventory

Proper Inventory

Proper Inventory

82

Space Management(Principles: Art and Science)(Principles: Art and Science)

SpaceManagement

83C:/data/customer/ACFS/ACFS2 6/4/99 (83)

Space Management(Principles: Art and Science)(Principles: Art and Science)

Data Sources

Store Specific or Cluster POG Measures

SpaceManagement

84

Space Management(Getting “IT” Right at the Shelf)(Getting “IT” Right at the Shelf)

EIA

SpaceManagement

85

Insights to ActionSpace Management


Sales / Category / Space Sales / Category / Space analysis.analysis.

Pressure on permanent space and Pressure on permanent space and effective inventory levels.effective inventory levels.

Continuous Assessment of Continuous Assessment of each SKU performance.each SKU performance.

Exciting new CSD category Exciting new CSD category innovation has “Squeezed” core innovation has “Squeezed” core CSD brand space. CSD brand space.

Tight Space has stunted core CSD Tight Space has stunted core CSD brand growth and expansion brand growth and expansion opportunities.opportunities.

Develop and implement a Develop and implement a course of action for product course of action for product introductions.introductions.

SpaceManagement

86

Summary - Coca-Cola is Focused on Understanding the Shopper

• We are engaging every aspect of our system to become a shopper-insights led, shopper marketing-driven organization.

• We are driven to help customers differentiate themselves by targeting shoppers based on their unique needs states and occasions.

• We are working with retailers to develop segmented business solutions that will better differentiate their stores and increase beverage category and total store sales.

• We are converting Shopper knowledge into information in We are converting Shopper knowledge into information in action, information focused on results.action, information focused on results.

Summary

Coca Cola

Business

shopping patterns

likedislike shopping

smart budgetshopping

important important

family trust matters

unplanned purchases

shopper behavior source

advancedshopperinsights