On February 13, The Coca-Cola Company released its fourth quarter and full-year financial reports for 2023. In the fourth quarter, the company’s revenue was US$10.849 billion, an increase of 7%, exceeding market expectations of US$10.65 billion; operating profit was US$2.273 billion, an increase of 10%; earnings per share was US$0.49, an increase of 10%.
For the full year of 2023, the company’s revenue was US$45.754 billion, an increase of 6%, exceeding market expectations of US$45.49 billion; operating profit was US$11.311 billion, an increase of 4%; earnings per share was US$2.69, an increase of 8%.
“Over the past year, our employees and partners have risen to meet new challenges, allowing us to achieve excellence on a global scale and deliver outstanding results in an ever-changing world.” James Kunjie, Chairman and CEO of The Coca-Cola Company James Quincey, CEO of Coca-Cola Co., said, “As we begin the new year, we are confident that our ‘all-weather strategy,’ our strong product portfolio, and the Coca-Cola system working together will continue to create value in 2024 and beyond.”
Talking about the Chinese market, Zhan Kunjie said in the earnings call, “2023 has started strongly, and our investment during the Spring Festival of the Year of the Rabbit allowed us to achieve outstanding market performance in the first quarter. This year, we once again invested heavily in the Chinese New Year . We will continue to invest, not only to capitalize on major holidays such as the Spring Festival this year, but also to restore the growth momentum of carbonated beverages and focus on revenue growth management and execution opportunities.”
In addition, The Coca-Cola Company has released performance guidance for 2024, predicting that organic revenue growth for 2024 will be 6% to 7%, and earnings per share will increase by 4% to 5%.
Understand local needs and innovate product portfolio
In terms of sales, the Chinese market performed well. In the fourth quarter, Coca-Cola Company’s global single-case sales increased by 2%; single-case sales in the Asia-Pacific market increased by 2%, mainly driven by growth in the Chinese and Indian markets. Looking at beverage categories, sales of carbonated beverages increased by 2% in both the fourth quarter and the full year, mainly driven by growth in Latin America and the Asia-Pacific market. Sales volume of fruit juice drinks, dairy products and plant-based beverages increased by 6% in the fourth quarter and 2% for the full year, mainly driven by the growth of Minute Maid Orange and other products in the Chinese market. The sales volume of bottled water, sports drinks, coffee and tea in the fourth quarter was the same as last year, and the annual growth rate was 1%. Among them, coffee sales volume increased by 3% throughout the year, mainly driven by the strong growth of Costa Coffee in the Chinese and British markets.
In the past year, local consumers’ consumption concepts have accelerated their diversification and upgrading, putting forward higher requirements for product and scene innovation. Focusing on local consumer demand, The Coca-Cola Company focuses on the development of core categories and resonates with consumers with innovative products and creative experiences.
For example, during the Spring Festival of the Year of the Dragon, the flagship brand Coca-Cola teamed up with the up-and-coming paper-cut artist Chen Fenwan to launch the New Year limited edition packaging product “Year of the Dragon Limited Can”, which integrated the paper-cutting art with traditional cultural characteristics into the product packaging design, and combined with the classic deliciousness of Coca-Cola, Convey good expectations and wishes for the New Year. In addition, Coca-Cola has used a series of creative consumer activities for the Year of the Dragon to invite thousands of Chinese families to share “reunion” stories and record simple, real and refreshing joy for consumers.
Coca-Cola launches New Year limited edition packaging product “Year of the Dragon Limited Can”
Continuing past creative ideas and playing with consumers. In 2023, Coca-Cola’s global creative platform “Lechuang Unbounded” will launch two limited products – “Heroes Debut” inspired by the “League of Legends” game and the first “Next 3000” created with artificial intelligence, continuously extending product creativity boundary.
Sprite launched a limited-edition lemon-flavored soda to pay tribute to 1982 in the Chinese market in July 2023, setting off a wave of meme craze on the Internet. Drinking a cup of “82 Sprite” has become a new way of social interaction.
In 2023, Coca-Cola’s “Lechuang Unbounded” will launch two new limited products “Heroes Appear” and “The Next 3000 Years” in the Chinese market
In addition, Coca-Cola China is committed to innovating its product portfolio to meet consumers’ diverse drinking needs with a wide range of products. Recently, many of the company’s products, including Coca-Cola Zero Soda, Fanta Orange Soda, Chun Tea House sugar-free tea drinks and Costa Coffee House coffee drinks, were selected for the “Food Industry Nutrition and Health Action Improvement” certified by the China Food Industry Association. List of iconic foods with nutritional and health properties.
At the same time, Coca-Cola China was selected into the “Food Industry Nutrition and Health Action Management System Directory” and became a “National Food Industry Nutrition and Health Action Strategic Partner”. In the future, it will continue to contribute to the realization of the “Healthy China” strategic goal.
Deeply deploy the supply chain to drive sustainable growth
The growth in performance is closely related to the accelerated layout of its supply chain. Since 2023, Coca-Cola China has joined hands with its two major bottling partners, COFCO Coca-Cola and Swire Coca-Cola, to focus on sustainable operations, green supply chain and other aspects, continue to accelerate the layout of the supply chain, and help achieve long-term sustainable growth.
Regarding COFCO Coca-Cola, the relocation and new construction project of COFCO Coca-Cola Shaanxi Company started in Xi’an Economic and Technological Development Zone in January. The project is planned to cover an area of 170 acres, with a factory construction area of approximately 79,000 square meters, and a total investment of 1 billion yuan. The new factory is planned to have 8 beverage production lines and 1 syrup production line, with a maximum designed production capacity of approximately 1.1 million tons, and is expected to be put into operation in September 2025. At the same time, the production management of the new factory will be fully digitally upgraded to help improve production capacity and speed, and provide high-quality beverage products to local consumers.
In January, the relocation and new construction project of COFCO Coca-Cola Shaanxi Company started in Xi’an Economic and Technological Development Zone
To help further improve its ability to serve market demand, COFCO Coca-Cola’s multiple production lines will be upgraded in 2023. COFCO Coca-Cola Guizhou Plant has newly built three advanced intelligent automated production lines, increasing its annual production capacity to approximately 300,000 tons. The 72000Plus production line of COFCO Coca-Cola Jinan Plant was put into operation last year. It is the first mixed production line of 82000 water line and 72000 soda line in China.
(Left) COFCO Coca-Cola Guizhou Plant further increased production capacity to match market demand (right) COFCO Coca-Cola Jinan Plant’s 72000Plus production line was put into operation last year
As for Swire Coca-Cola, in September 2023, the Suzhou Swire Coca-Cola Kunshan Development Zone with a total investment of RMB 2 billion officially broke ground. The project is scheduled to be completed and put into production before the end of 2025. It is one of Swire Coca-Cola’s largest strategic investments in China to date. . The Guangdong Swire Coca-Cola Greater Bay Area Intelligent Green Production Base Project was signed in May 2023 and settled in Huangpu District, Guangzhou. The project has a total investment of approximately 1.2 billion yuan, an area of approximately 128,500 square meters, and an annual production capacity of approximately 660,000 tons. In the next ten years, Swire Coca-Cola’s total investment in mainland China is expected to exceed RMB 12 billion.
In September 2023, Suzhou Swire Coca-Cola Kunshan Development Zone officially broke ground
At the same time, Swire Coca-Cola is also accelerating the pace of 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 both parties has been applied to 25 factories and nearly 71 production lines of Swire Coca-Cola China. Since its launch, the net production efficiency of the MIS production line has increased by approximately 4.2%.
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2024-02-14 02:36:00
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