"We've really achieved a 'strong rise.'" James Quincey, chairman of the coca-Cola company's board of directors and chief executive officer, said. The beverage giant he led once again handed over a financial report that amazed the industry. On February 10, Coca-Cola released the fourth quarter and full year of 2021 financial report, compared with 2019 before the epidemic, global single-box sales have increased in each quarter of 2021, and single-box sales in 2021 have also fully caught up with the 2019 level.
Earnings reports showed fourth-quarter revenue of $9.46 billion, up 10% year-over-year, exceeding market expectations of $8.94 billion; earnings per share of $0.45, higher than market expectations of $0.41; global single-carton sales increased 9% year-over-year, and single-box sales in Asia Pacific increased by 11% year-on-year, mainly due to strong growth in China, India and the Philippines.
For the full year 2021, the company's revenue was $38.66 billion, up 17% year-over-year, exceeding market expectations of $38.08 billion; operating profit was $10.31 billion, up 15% year-over-year; earnings per share were $2.32, higher than market expectations of $2.29; and global single-box sales increased 8% year-over-year.
The four words "strong rise" in Zhan Kunjie's mouth mean that Coca-Cola is breaking through under many uncertainties and has once again proved its strong strength in the global beverage industry pattern. This strength comes from the company's years of experience and long-termism, which not only allows Coca-Cola to show enough resilience in the face of uncertainty to resist risks; more importantly, this strength can also become a self-driven explosive force.
Based on the market performance in 2021, Coca-Cola also issued 2022 full-year performance guidelines, and it is expected that the annual organic revenue growth rate in 2022 will be in the range of 7%-8%, and earnings per share will increase by 5%-6% compared with $2.32 in 2021.
"We have reason to believe that the progress made in the strategic transformation has made Coca-Cola a more agile and agile beverage company in all categories. The current market environment is still full of changes, and we hope to build on the good momentum of 2021 to continue to drive business growth and maximize returns." Zhan Kunjie said.
Coca-Cola's fourth quarter and full year of 2021 results exceeded expectations, achieving a "strong rise" and "all-category beverage companies" How to combat uncertainty?
If you want to answer the question of why Coca-Cola has been able to "rise strongly", then you need to understand the company's long-term doctrine; or what kind of beverage company does Coca-Cola want to be in the long run?
Looking at the Annual Review, which the Coca-Cola Company publishes every year, you'll see a noticeable change. In this report, there will be a large group photo of the board members, who usually hold up classic Coca-Cola and soda products in their hands. However, after 2017, the photo shooters appeared in the hands of SmartWater bottled water, Honest tea drinks...
It was in 2016 that Coca-Cola embarked on a radical overhaul with a long-term goal of becoming a "Total Beverage Company." This goal has two aspects, one is to continuously strengthen the competitiveness of classic brands, and on the other hand, to bring consumers fresh categories and beverage choices.
The most immediate effect of this is to increase efficiency. "Optimizing the brand mix is something we've always wanted to do. We can liken the brand combination to cholesterol, and too high cholesterol can damage arterial blood vessels. Currently, we've eliminated nearly half of the brands, which account for only 2% of sales, but each product occupies the same shelf space (and the operating costs). Zhan Kunjie said at the 2021 Redburn CEO Conference.
The Coca-Cola Company implements the "all-category beverage company" strategy
In the long run, the strategy of "all-category beverage company" can help the company cope with market risks and unforeseen challenges. For example, the Strong China Market, which was proposed in the financial report, continued to promote the "all-category beverage" strategy in the past year of 2021, such as Coca-Cola China's breakthrough entry into the low-alcohol and low-temperature milk markets, demonstrating good product innovation and business expansion capabilities.
There is no doubt that dairy products and low-alcohol are the "outlet" in the consumer goods industry in the past 2021, and Coca-Cola's ability to flexibly grasp changes in consumer preferences and industry trends, and layout at a very fast speed, is the key to its strong growth. These fresh categories not only help Coca-Cola to bring considerable performance returns, but also allow it to penetrate into different market segments, under the blessing of the "all-category beverage company" strategy, further enhance its market share in the beverage industry, and establish high enough barriers to deal with future risks and uncertainties.
Such results can be seen even more from the financial report of The Coca-Cola Company. Coca-Cola's share of the non-alcoholic ready-to-drink beverage market increased in both the fourth quarter and the full year 2021, with both the value share of the home and out-of-home channels rising. At the same time, the company's share of value in the non-ready-to-drink beverage market, including those of home and out-of-home channels, exceeded 2019 levels.
The long-termism of the supply chain helps it accelerate the implementation of "innovation and the way"
In fact, the global economy has not yet completely eliminated the impact of COVID-19. Under the epidemic, the global business model has been tested. In May 2020, the Economist Intelligence Unit (EIU) released a report saying that the epidemic would reverse globalization by accelerating the development of regional supply chains. The Economist magazine, on the other hand, was more direct, launching a cover story called "Goodbye Globalization." The direct effect of the weakening effects of globalization is that the business of those multinationals is hindered, and the rate of innovation declines and thus fails to maintain an advantage in the competition.
But the Coca-Cola Company was able to meet such challenges.
Coca-Cola attaches great importance to the construction and accumulation of supply chains in the layout of different markets. For example, in the Chinese market, it is still expanding its production capacity and improving its supply chain strength. At the beginning of the new year in 2022, Swire Coca-Cola, one of Coca-Cola's bottling partners in China, announced an investment in Guangdong to expand a new production base, with a planned investment of RMB 1.25 billion to build an intelligent and green production base including 12 beverage production lines, three-dimensional warehouses and supporting facilities – an investment that refreshes Swire Coca-Cola's single investment record.
Swire Coca-Cola announces investment in the expansion of a new production site in Guangdong
Previously, the record was maintained by the Zhengzhou Swire Coca-Cola Expansion and Reconstruction Project. Just last October, the groundbreaking ceremony of the Zhengzhou Swire Coca-Cola Expansion and Reconstruction Project was officially held in Zhengzhou, Henan Province. The total investment of the project is not less than 900 million yuan, and the maximum annual production capacity of the new plant after completion will reach 1 million tons.
Swire Coca-Cola's warehouse expansion project at its Xiamen plant in Fujian province was also officially completed in January 2022, expanding the floor area of approximately 4,770 square meters on the basis of the old warehouse, adding approximately 5,300 new storage plates, approximately 848,000 cases of beverages, and a maximum daily throughput of approximately 7,000 plates of products in the warehouse, resulting in the expansion of product storage.
In addition, digital operations are also helping Coca-Cola's China supply chain system to improve operational efficiency.
For example, in the fourth quarter, COFCO Coca-Cola officially launched the "Central Planning Center", which aims to meet the world-class demand level, optimize system investment and improve asset utilization, optimize end-to-end supply costs, become best practices and innovative exploration as the core value, carry out overall planning from the five aspects of architecture, personnel, processes, systems and performance, and coordinate end-to-end supply chain planning from the company-wide level to meet customer needs with the best service, highest efficiency and best cost.
At the macro level, the long-term supply chain layout can help Coca-Cola improve its resilience. For example, in the context of the decline of global economic capacity under the epidemic, it can use its supply chain advantages to maintain a leading edge in different markets and continue to make breakthroughs.
Such a production capacity layout and the grasp of the right to speak in the supply chain can also make it more efficient to routinely implement the strategy of "all-category beverage companies" and accelerate "innovation with a way".
Take the "Lemon Road" launched in the Chinese market in 2021 as an example
This is a Japanese alcoholic beverage launched by the Coca-Cola Company after drawing inspiration from popular drinks in Japanese izakaya. After it was released in the Kyushu region of Japan and received positive reviews, the product was launched nationwide in Japan. Subsequently, when the trend of low-grade wine emerged in the Chinese market, Coca-Cola China quickly introduced this product into the Chinese market, and its long-term doctrine in supply chain and production capacity made it possible for "Lemon Road" to quickly enter the Chinese market, meet the rapidly changing preferences and needs of consumers, and is also an efficient practice of "innovation and morality".
Sustainable innovation is another of Coca-Cola's long-term practices
In the fourth quarter, Coca-Cola China provided more than 4,000 sets of overalls made of rPET (recycled beverage bottle material) to the waste removal teams at all venues of the Beijing 2022 Winter Olympics
, both functional and design-inspired. Coca-Cola China cleverly integrates the "hui" element into workwear, echoing the "Recycle Me" sustainable packaging logo on Coca-Cola packaging bottles, so that the waste removal team wearing overalls can become the promotion ambassador of the concept of sustainable development, encouraging more members of the public to recognize the value of recycling beverage bottles.
Coca-Cola China provides rPET overalls for all Winter Olympic venues for waste teams
Not only these overalls, but also Coca-Cola China is showing off its innovations in sustainability at the Winter Olympics, a global event of interest. Coca-Cola China also designed and provided nearly 400 beverage bottle recycling bins "bottles and cans and barrels" using rPETG material (beverage bottle recycling material) for the Winter Olympics, as well as more than 10 "no waste in the world" interactive devices, through multiple contacts and creative forms to enhance the public's awareness of beverage bottle recycling. The Coca-Cola Leisure Center opened in the three Major Winter Olympic Villages, whether it is soft decoration, furniture and facilities, or the rainbow wall with the original intention of the Coca-Cola Company, etc., have widely adopted rPET (G) (recycled material for beverage bottles).
Coca-Cola Leisure Center in the three Major Winter Olympic Villages, Coca-Cola China presents the circular aesthetics of beverage bottle regeneration through different forms
The coca-cola company's long-term doctrine is not limited to its own business development, but also focuses on the future life of the entire community and even the whole society. In addition to the Winter Olympics, Coca-Cola China has also been practicing the concept of "no waste in the world", such as providing the recycled material device of beverage bottles to the community, conveying the concept of sustainable development to the public in the bits and pieces of life, and constantly advancing to create a greener and environmentally friendly future for all mankind.
Without accumulating steps, it is impossible to go thousands of miles, and it is impossible to become a river and a sea without accumulating small streams. The Coca-Cola Company, one of the greatest companies in human business civilization, is showing us the secrets of how it has maintained resilience and innovation over the years.
While people are eager to show their innovation and differentiation, Coca-Cola has maintained its own pace of progress with its long-termism. For example, the far-sighted strategy in product layout, the solid foundation at the supply chain level, and the long-term practice of humanistic care and sustainable development are constantly enhancing the company's internal strength. As we have said before, this strength can cope with changes in the market pattern and the uncertainty of the economic environment, reflecting a strong resilience, so that it has not been defeated in the difficult challenge, but surpassed its pre-epidemic self.
As Neville Esdale, author of Long-Term Value and former chairman of Coca-Cola, writes in the book, Coca-Cola's long-term business strategy lies in a strategy that adheres to long-term value and can continue to grow and make profits even in the face of change.
Now it seems that this strategy has worked.