News & Events
Thursday 23 March, 2017
Becoming a great company
Yesterday, Nik Jhangiani, our CFO, and I were at the Consumer Analyst Group Europe (CAGE) Conference in London talking with investors about how Coca-Cola European Partners will become the world’s most valuable Coca-Cola bottler and a leading consumer goods company. [You can watch a replay of the presentation here.]
First, we’re well positioned for growth
Since integrating the bottling operations of Coca-Cola Enterprises, Iberia and Germany to form Coca-Cola European Partners, we have created a business with the right platform for growth. We are already sharing best practice across CCEP on a new scale and realising efficiencies, which translate into commercial effectiveness. That’s why we’re on track to achieve our mid-2019 pre-tax savings objective of €315 million to €340 million.
Importantly, we’re confident that CCEP’s operating model provides a solid platform for growth, and we see several areas for value creation, including innovation, brand development, and improved marketplace execution.
We know where growth will come from
We’re also clear where we’re going to grow. The non-alcoholic ready-to-drink (NARTD) category has estimated total retail sales of approximately €100 billion across our territories, and in that category are a number of segments with significant opportunities for growth.
Like our partners at The Coca-Cola Company, we are adopting a total beverage company mindset – strategically diversifying our portfolio to deliver what consumers want, whether that be drinks with less sugar, new flavours or more convenient packaging.
For instance, the still and water segments represent more than 50 percent of total retail sales, yet we currently have a low value share in these segments. We see this as a significant opportunity to profitably grow with some of the high quality brands within our portfolio.
We’re looking at all opportunities across the portfolio, from changing recipes and introducing new products and scaling brands across our territories to meet consumer needs. People’s tastes and preferences are changing, and that will drive our innovation.
Last year, we launched several low and no calorie product innovations, including new Coca-Cola Zero Sugar in Great Britain, France, Belgium/Luxembourg and the Netherlands, and this year, we are introducing it in Spain, Germany and the Nordics. Honest, which we are expanding in GB, represents a significant opportunity as a premium, organic brewed ice tea. In Germany, VIO is a successful brand built over the last few years, and we recently added a premium range of organic sparkling lemonade VIO.
Investing in even greater collaboration with our customers
At the heart of our efforts will be an even greater focus on connections with our customers. This allows us to put more of our products in the hands of more consumers, more of the time. We will work more closely than ever before with our customers, ensuring our senior leadership teams are connecting and sharing priorities, as well building joint business plans. We are also constantly building and developing our data on how shoppers behave and how they make their decisions, to support our customers as we grow the category together.
We are also focused on freeing up time for our 5,500 sales people to be with our customers more, calling on 1 million outlets across our markets.
We’re a good company, but we’re going to become a GREAT company
I am very proud to be the CEO of a company that is listed on the 2016 Dow Jones Sustainability Index. This is a good company already – but we are going to be great.
We are developing a new sustainability strategy for Coca-Cola in western Europe in partnership with The Coca-Cola Company. We have been seeking input from hundreds of external stakeholders and consumers to understand what matters to them and learn what we can do better, building on our progress in several areas such as sustainable packaging, diversity, evolving our portfolio and community involvement.
Our goal is clear: we want to lead in sustainability while driving value for all of our stakeholders, including our shareholders. We know from the past that if we put sustainability at the centre of our business decision-making, it can reward us with cost savings, build consumer and customer trust and, ultimately, become a growth driver in itself.
Our people are central to our success
It’s a testament to the hard work of the 24,500 people at CCEP that we were able to achieve so much in 2016 and release such positive results. It takes a single-minded focus driven by a shared ambition. Everyone in the business, whatever they are doing and wherever they do it, are part of this success.
Creating the right culture is fundamental to our growth. We are working to encourage an entrepreneurial culture where everyone knows what our purpose is and how they contribute to it.
Our purpose as Coca-Cola European Partners is not only to delight customers and consumers with our drinks and our service, but to create shared and sustainable value. That means value for our shareholders but also value for our people, our customers and the communities in which we work.
There’s no doubt that we can do more, but the foundations are in place and growth is apparent. Over the next two years we have ambitious targets still to meet and – as I told the CAGE Conference this afternoon – I know we have the people, the plan, and the passion to do it