The Coca-Cola Company at Morgan Stanley Global Consumer Conference 2014 (Transcript)

Sandy Douglas, SVP, Global Chief Customer Officer and President, Coca-Cola North America Presents at Morgan Stanley Global Consumer Conference on November 19, 2014. Below is the webcast audio and the associated transcript of the event…

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Dara Mohsenian – Analyst, Morgan Stanley

I’m Dara Mohsenian, Morgan Stanley’s beverage and household products analyst. We’re very excited to have Coca-Cola with us here today. Sandy Douglas will be presenting, the Senior Vice President at Coke, and Global Chief Customer Officer and President of Coca-Cola North America. It’s a great time to have Sandy here.

Clearly, Coke has a very successful long-term track record, but recent trends have been a bit more difficult the last couple of years and the company has responded in our minds with very significant positive changes announced recently. And North America is really on the forefront of a lot of those changes in terms of a pricing focus and mix focus under Sandy’s leadership recently, marketing boost and pending bottler refranchise.

In terms of format today, Sandy’s going to present for about half of the time, and then we’re going to move to a fireside chat. So, thanks for coming, Sandy.

Sandy Douglas – President, Coca-Cola North America

Good morning, everybody. I’m happy to be here this morning with you to tell you the progress that we’re making in the North America business, the company’s oldest market. And I think the best way to summarize the presentation — well actually I’ve got to start with this. Obviously, you’re cautioned by our forward-looking statement that can be found on our investor website.

The best way to describe it, is to say this. Our focus in North America, playing our role in the Coke global jigsaw puzzle, is to focus on driving economic profit and value creation for the company, and to do that with three main levers: accelerating top-line growth, margin expansion, and capital efficiency. That is our role in North America, and we’re going to do that. The action agenda is driving brand growth through an improving quantity and quality of all types of marketing, but led by great advertising.

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Second, focusing on an insight-driven and refreshment-oriented value price pack architecture, and I’m going to get into the specifics of that.

Next is continuing our significant momentum that we’ve achieved over the last four or five years in the still categories. Through acquisition and organic brand development, we’ve become a powerful participant in the non-carbonated beverage business. And then finally, the sort of ultimate enabler of this, both at the top line but also in operating margin expansion and significant economic profit improvement, is the re-franchising of the bottling assets that we acquired from CCE. That we’ve been working together with our bottlers over the past few years to completely re-architect the U.S. bottling system for growth in the modern market that we’re competing in, in a differentiated way, but in a way that would allow the Coca-Cola Company to return to its more fundamental and basic concentrate model.

So, let me start with the core pillars, and this strategy is really not changed. The thing I want to emphasize, though, is that the Coca-Cola Company’s business is driven by its brands. The penetration, the frequency, the amount per serving, the consumer spend, with our brands, is the core value driver of our growth and our business.

The second one is our ability to turn that value into value for customers, and to focus on — and particularly in the United States, where it’s a tremendous number of the customers including the one that just presented in here, are deep and long-term partners of ours. And we do this business with them, and for them, and our ability to create value with them is a core lever in the value that we’re able to capture from our brands.

And then finally, capability. Capability of our total system to sustain and repeat our success. So, let me start on the brands, and I’ll give you a little headline on sparkling and then I’ll get into some results. I would describe our sparkling strategy as a very massive and intense return to the fundamentals. The basics of brand building. What you see on the left of the slide is an outdoor board that’s up around the country now that focuses on the intrinsic, delicious, amazing taste of an ice-cold Coke.

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