Coca-Cola Has Announced Large Investments into the Brand Building

The Coca-Cola Company yesterday unveiled its full-year and fourth quarter 2011 operating results.

Photo: the Coca-Cola logo

The company reports it plans to cut $550 million to $650 million in annual costs by the end of 2015 and to reinvest the money in marketing and brand building.

Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company, said, “Even as we believe that global market volatility will continue in the near term, the breadth of our global footprint and the strength of our brands create a resilient business that was built for times like these. As we enter into the third year of our 2020 Vision, our Roadmap for Winning Together remains clear. The assumptions that shaped our 2020 Vision have not changed. Our expectations for long-term, sustainable and balanced growth across emerging and developed markets have not wavered. And we will continue to make significant investments in our future all around the world to support the tremendous opportunity we see in nonalcoholic ready-to-drink beverages, one of the fastest growing segments in consumer packaged goods.”

Coca-Cola reports worldwide volume growth of 5% for the full year and 3% during the quarter. The worldwide volume grew 4% for the full year and volume growth for the full year was well-balanced across the globe, with solid growth in key developed markets like North America, Japan and Germany as well as double-digit growth in key emerging markets like India and China.

In 2011, Coca-Cola continued to see growth in sparkling beverages, with gains in global volume and value share for the full year and in the quarter. It was a result of the focus on the brands, especially on the brand Coca-Cola. Brand Coca-Cola volume grew 3% in both the full year and the quarter with strong growth in the fourth quarter in a number of markets around the world.

Still beverage volume grew 8% for the full year and 6% in the quarter, due to growth in categories of ready-to-drink teas, juices and juice drinks, energy drinks and water brands. International still beverage volume grew 10% for the full year and 7% in the quarter, and North America still beverage volume grew 4% for the full year and 3% in the quarter.

Coca-Cola’s brand Minute Maid Pulpy demonstrated 20% volume growth in 2011, while energy drinks volume grew 19% in the quarter with global distribution of Burn energy brand, which is now available in nearly 80 countries. The company’s ecology move, including PlantBottle in North America and I LOHAS/Ecoflex lightweight crushable bottle for water brands in Asia and Latin America, helped to boost sales in the water category by 7% in the quarter.

However, for fiscal 2011, the company reported net income of $8.57 billion or $3.69 per share, 27 % lower than $11.81 billion or $5.06 per share in the prior year, says Nasdaq.