Supplier insights: Coca-Cola reorganises for growth

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 31 August 2020

The Coca-Cola Company is establishing new operating units, global beverage category leads and a platform services organisation to align the business around a growth focus.

Driving growth through strong brands

The reorganisation has been developed to underpin the company’s ‘Beverages for Life’ strategy and capture growth opportunities. The aim is to optimise its global scale and local capabilities. Central to this, is the creation of new operating units that will work with five marketing category leadership teams. Supporting this structure will be a Platform Services organisation. The overall aims include taking execution closer to customers, prioritising a portfolio of strong brands and creating a disciplined innovation framework.

Source: IGD Research

Nine new operating units

The company is streamlining its 17 business units into nine new operating units. There will be more consistency across structure, with a focus on eliminating the duplication of resources and scaling new products more quickly. The nine units will sit under four geographical segments, along with Global Ventures and Bottling Investments, with operating leaders reporting to president and chief operating officer, Brian Smith.

Global category leads

To support the new business units and drive its current portfolio rationalisation process, the company is aiming to deepen its leadership in five global categories with the strongest consumer opportunities. In July, it outlined plans to streamline its brands, building on progress made during the COVID-19 pandemic. Of its 400 master brands, more than half are single-country brands with little or no scale and represent only 2% of total revenue. Culling some of these brands entirely, not just products, will create the flexibility to invest in its major brands. The leaders of these categories will work across the networked organization to build the company’s brand portfolio, reporting to chief marketing officer Manolo Arroyo. The five global categories are:

  • Coca-Cola
  • Sparkling Flavors
  • Hydration, Sports, Coffee and Tea
  • Nutrition, Juice, Milk and Plant
  • Emerging Categories

Platform Services

Platform Services will look to create efficiencies and deliver capabilities at scale globally. This will include data management, consumer analytics, digital commerce and social/digital hubs. The aims is to improve and scale functional expertise and eliminate duplication of efforts across the company. It will also work in partnership with the company’s bottlers. Platform Services will be led by senior vice president and chief information and integrated services office, Barry Simpson.

Workforce changes

The structural changes will result in the reallocation of some people and resources, which will include voluntary and involuntary reductions in employees. To minimise the impact, a voluntary separation program will first be offered to approximately 4,000 employees in the US, Canada and Puerto Rico. A similar program will be offered in many countries internationally. Global severance programs are expected to incur expenses of $350m to $550m.

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