ko 2020 japan
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Japan – Growth In An Evolving,
Developed MarketDan Sayre President, Japan Business Unit
A Growing $60 Billion Business
In A Mature Market
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1980 1985 1990 1995 2000 2005
Source: All Japan Soft Drink Bottlers Association & Nikkan Keizai Tsushinsha
Nonalcoholic RTD Beverage Market
MM Unit Case Volume
Other
Water
Sports
Tea
Coffee
Juice
Sparkling
Energy
2000-2008
CAGR (%) Category
+3
-3
+1
+1
+3
+11
+1
+2
2008
A Growing $60 Billion Business
In A Mature Market
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1980 1985 1990 1995 2000 2005
Source: All Japan Soft Drink Bottlers Association & Nikkan Keizai Tsushinsha
Nonalcoholic RTD Beverage Market
+3
-3
+1
+1
+3
+11
2000-2008
CAGR (%)
+1
+2
2008
Other
Water
Sports &Wellness
Tea
Coffee
Juice
Sparkling
Energy
2008-2020
CAGR (%)
+1
+1
+ 2
+2
0
+1
+1
+2
Other
Water
Sports
Tea
Coffee
Juice
Sparkling
5%
Category
2008Percentage
of Total
9%
13%
29%
Energy 2%
11%
16%
15%
0.5 pt conversion / year = $800 MM incremental retail value / year
2020
MM Unit Case Volume
Well Positioned To Lead Growth#1 Coffee
Mental Renewal & Energy
#1 Sparkling
Uplifting & Social Occasions
#1 Sports
Replenishment & Vitality
#2 Juice
Purposeful Nutrition
#2 Tea - #1 Blended Tea
Meal Occasions & Refreshment
#1 Personal Water
Hydration & Detox
$17 Bn Diversified Beverage PortfolioSource: Intage and Shokuhin Marketing and Japan Soft Drink Association (2008)
An Emerging „New Normal‟ Impacting Japan
…Overlapping Long-Standing Fundamentals
#2 Global
Consumer Economy
Discerning & Demanding
Consumers
Trend Setting &
Fashion Oriented
Relentless
Innovation
Shift of Price - Value Equation
Break-up of
Homogeneous Consumers
Rapidly Aging Society
50+ Age = 43% Of Population
Widening Equality Gap +20%
- ¥140 In Lunch Budget
Consolidation & Blur
of Trade Channels
New Formats = 130% Of Growth
Strong Eco Mindset
New Government’s Commitment
25%Reduction
Continued Growth Over the Past Decade
750
800
850
900
950
1,000
KO Japan Total Unit Case Volume
12 Month Moving Total(In MM)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2020 Growth Strategies
Expand Portfolio To Address Underserved Age Groups
Innovate Brand / Pack / Price Offerings For „New Normal‟
Invest In Hot / Cold Equipment For New Occasions
Lead Industry Sustainability And Eco Initiatives
Reshape Bottling System To Unlock Latent Value
236252
263278
2006 2007 2008 2009
Reigniting Profitable Growth Of SparklingKO Japan Core Sparkling 2009 vs 2006
+7MM +3 MM
+5% +15%
Unit Case CAGR* Immediate Consumption Transactions*
New Drinkers Household Penetration**
KO Core Sparkling Volume* (MM unit cases)
Sep 2009 vs. Jan 2007. Source: B3, total population*12 MMT Sept 2009 vs 2006
**Source: Intage Sept 2009 vs 2006
Strong Innovation Is Driving Growth
+2%* 3%*
Connecting
Digitally With
Teens
Attracting
40+ Year Olds
Sourcing From
Adjacent
Categories
+35%*
Coke Zero + Diet Coke in 2009 vs Diet Coke in 2006
*Sept 2006 YTD to Sept 2009 YTD CAGR
Diversify Georgia Pack / Price
For „New Normal‟
VALUE CORE UPSIZE/ VALUE PREMIUM
¥120-130¥120 ¥130 ¥130-140 ¥160¥100
% Mix
Future 65% 5%5% 25%
New Georgia Campaign: Yokoso Georgia
Exciting Merchandising Recognizing Hard Working Men
Hot / Cold Equipment For New Occasions
100%
10%
2020
Today
Continue To Lead In Eco-Vending & Cashless Lead With State Of The Art Design
More Space In More Outlets 100% Coverage By 2020
Solar Panel HFC-FreeE4040% Less Energy
3D Design Vendor
3D Design Cooler
Freestyle Fountain
Zero BlockCoolers
Hot and Cold Equipment
Account Specific Opportunities
Lead in Sustainability With Eco Innovations
• Launched May 2009
• Lightest package in Japan
• #1 brand in convenience stores
and supermarkets
#1 Water In Personal Packs #1 Blended Tea In Japan• First ever tea made from plants both
“inside and out”
• 30% renewable plant-based material
launching soon
Capturing More Value From
A $60 Billion Industry
And
Inspiring The Entire System
With Winning Innovation