ATLANTA — The Coca-Cola Co., in navigating the impacts of the ever-changing COVID-19 situation, will selectively scale up in regional markets.
“COVID, indeed, has got more staying power, I think, than anybody thought at this time last year, and we, like many companies, were using this period as a catalyst to drive a lot of actions that perhaps would have taken a little longer,” said John Murphy, executive vice president and chief financial officer, on Sept. 9 in the virtual Barclays Global Consumer Staples Conference. “And the name of the game at the moment is to build the wherewithal to adapt to COVID and to stay relevant as the world continues to work through this.”
Strong brands and a strong balance sheet are two assets for Atlanta-based Coca-Cola. Having the scale to be flexible is a third one.
“We continue to take a number of actions to allow us to have greater flex around the world to align our marketing agenda with what's happening in the local markets that we do business in,” Mr. Murphy said. “We have moved from a much more decentralized approach to how we work with our vendor base, our agencies to be in a position to both leverage our scale but also to stay relevant to the consumer and to customers that we do business (with).”
The company has a global footprint in over 200 markets. In January 2020, Coca-Cola acquired the remaining stake in fairlife LLC from its joint venture partner Select Milk Producers, giving it 100% ownership of the ultra-filtered milk company.
“It's sort of a combination of being able to scale for where and when it makes sense, whether that's with brands or with other elements of the mix but by the same token stay very close, stay very intimate to the markets in which we operate,” Mr. Murphy said. “And getting that balance right is a … it’s a daily tussle.”
Functions of operating units within Coca-Cola connect horizontally now whereas it used to more hierarchical, said Brian John Smith, president and chief operating officer.
“So it's much more agile in the sense that the kinds of things that they want to scale with all of the operating units, they can do directly without sort of the going up and down the vertical ladder, if you will,” he said.