Coca-Cola has committed to increasing consumer marketing spend to pre-pandemic levels, having already “significantly stepped up” investment compared to last year.
Coca-Cola’s overhaul of its marketing and innovation model is bearing fruit, the company said today (10 February) at its fourth quarter and full year 2021 results presentation.
The drinks giant unveiled a new marketing model at the end of last year and revamped its agency model, appointing WPP as its global marketing network partner to help prevent siloing and drive long-term growth.
Group chairman and CEO James Quincey said today that the move is already showing positive results.
“Our network marketing model, with global category teams and local operating units, is allowing us to focus on end-to-end consumer experiences that are data-driven and always on,” he said.
“Our announcement of WPP as our global marketing network partner is a foundational component of our new marketing model. This new agency approach gives us access to the best creative minds regardless of source and is underpinned by leading edge data and technology capabilities.”
We expect to increase consumer-facing marketing spend toward levels similar to 2019, while improving the quality of that spend and allocating it in a more targeted manner
John Murphy, Coca-Cola
As part of this drive he highlighted the importance of Coca-Cola’s ‘Real Magic’ brand platform, which it launched in September. It is designed to change the way the brand communicates with consumers, by moving away from broadcast communications to create an ecosystem of experiences.
“The Real Magic campaign is the first campaign to be co-created internally, leveraging this new end-to-end approach and the campaign is showing strong results with consumers,” added Quincey.
“The approach will allow us to deliver best-in-class consumer-centric marketing experiences across our categories and around the world.”
Coca-Cola has also committed to returning marketing spend to the level it was in 2019, as outlined in its Q3 results. Chief financial officer, John Murphy, said today the business had “significantly stepped up” investment compared to last year.
“From a marketing perspective, we expect to increase consumer-facing marketing spend toward levels similar to 2019, while improving the quality of that spend and allocating it in a more targeted manner,” he said.
“We’ll continue to invest purposefully in our brands and markets to support top-line growth, with spend more heavily weighted towards consumer-facing activities.”
A more disciplined approach to innovation has also proved effective, Quincy said. “Revenue per launch and gross profit per launch were up 30% and 25% respectively versus prior years,” he added.
Overall, Coca-Cola experienced what Quincey described as “dynamic operating conditions” through 2021, but achieved another quarter of sequential improvements at the end of the year.
It ended 2021 with higher volume sales than in pre-pandemic 2019, with global volume sales up 9% in the final quarter and 8% for the full year. Meanwhile net revenues were up 10% in the quarter to $9.5bn (£6.97bn), and by 17% to $38.7bn (£28.4bn) for the full year.
“In 2021 our system demonstrated resilience and flexibility by successfully navigating through another year of uncertainty,” said Quincey.
“We focused on our key strategies and emerged stronger. We are confident that progress on our strategic transformation has made us a nimbler total beverage company. While the environment remains dynamic, we will build on the momentum from 2021 to drive top line growth and maximise returns.”