Click 'Read Original' for details. Facing an overall industry decline, what attempts has this century-old beverage giant made? Recently, Kantar released its latest consumer report, showing that in the 2017 global FMCG market, 76% of market growth came from channels other than hypermarkets and supermarkets. Among them, e-commerce, discount stores, and cash-and-carry have become the three fastest-growing channels, accounting for 15%, 5.2%, and 4.4% respectively. Compared to the traditional FMCG retail market where supermarkets and hypermarkets dominate with only 8% growth, e-commerce channels have performed exceptionally well. The challenges brought by channel transformation to brand owners are self-evident, especially for those relying on traditional channels and KA stores. In the context of overall slowing growth in the FMCG industry, traditional FMCG brand owners are undoubtedly facing a severe digital transformation. As a beverage giant with a 132-year history, how is Coca-Cola responding to this transformation? 1 Declining Performance, Poor Overall Industry Performance In the past, the rapid growth of most domestic enterprises was driven by China's huge population base. The demographic dividend and consumption upgrade brought strong consumer demand, which objectively drove the booming development of the FMCG industry. However, with a sharp decline in the number of newborns, population growth has begun to slow, and the trend towards an aging society is becoming more evident, directly leading to a slowdown in the performance growth of most FMCG companies. Coca-Cola's full-year net revenue in 2017 was $35.41 billion, a year-on-year decline of 15%; gross profit was $22.154 billion, down 13%; operating profit was $7.501 billion, down 13%. Coca-Cola's old rival PepsiCo also faced a grim performance, with net profit of $4.857 billion in 2017, a year-on-year decline of 23.26%, even worse than during the 2008 financial crisis. Additionally, changing consumer attitudes are also a significant reason for Coca-Cola's declining sales. The fitness trend in the United States began around the 1980s and 1990s, and became a popular trend in the late 1990s. It was at that time that the entire carbonated beverage market hit a turning point due to changes in consumer lifestyles. For Chinese consumers, the overall decline of carbonated beverages began in 2000. Relevant data shows that in 2000, carbonated beverages held a 36% market share in China, making them the largest beverage category. However, by 2012, this figure had dropped to around 20%, and the entire carbonated beverage category was surpassed by bottled water in 2013, becoming the largest beverage category. Many consumer reports also point out that more and more young consumers are beginning to focus on health, and 'a thermos in the left hand, goji berries in the right' has become a new normal. In this context, it is inevitable that carbonated beverages are being neglected. Moreover, more young consumers are pursuing personalized consumption, and the ubiquitous beverage shops and other beverage brands have also diverted some of the audience for carbonated beverages. According to data disclosed by Meituan-Dianping, fast-drink consumption has maintained high growth for many years. From 2013 to 2016, online transaction volume for fast-drink beverages increased by 116 times, with a growth rate of 836% in 2015 alone. 2 Actively Seeking Change: Coca-Cola's Diversified Innovation As more and more consumers pursue a healthy lifestyle, Coca-Cola has begun to experiment with product flavor innovation globally, continuously launching new products while retaining the classic cola.

▪ In 2017, Coca-Cola announced the launch of Coke Zero Sugar, using aspartame as an artificial sweetener;

▪ In 2017, Coca-Cola launched Coca-Cola Plus, which is sugar-free and zero-calorie, and not only healthy but also helps inhibit fat absorption and reduce triglyceride levels in the blood after meals;

▪ In 2018, Coca-Cola rebranded Diet Coke with new colorful packaging and introduced four new flavors: Ginger Lime, Feisty Cherry, Twisted Mango, and Exotic Mango;

▪ In 2018, after launching 'Sprite Fiber+' with resistant dextrin, Coca-Cola also introduced a product with this dietary fiber called 'Pure Joy Shenxian Water';

...... In addition, Coca-Cola has launched a series of new flavors, such as vanilla cola, cherry cola, ginger cola, peach cola, sakura cola, black coffee cola, orange cola, lemon cola, lime cola, and green tea cola... It is not difficult to see that Coca-Cola's product innovations above are all following the 'health' route, aiming to better meet consumers' pursuit of a healthy life. At the same time, it allows consumers to enjoy the refreshing feeling of carbonated beverages without worrying about health issues, gradually shedding Coca-Cola's 'unhealthy' label. Moreover, a richer variety of flavors also helps stimulate the curiosity of different consumers, generating new purchase desires for Coca-Cola products. The effect of this product innovation is also evident. According to Coca-Cola's Q1 2018 financial report, the company's first-quarter revenue was $7.6 billion, achieving 5% organic growth, exceeding analysts' forecast of $7.34 billion; 4% came from concentrated sales growth, and 1% from price adjustments and other factors. 3 Coca-Cola's Strategic Adjustments

  1. Product Category Innovation To meet the diverse consumption needs of consumers and provide richer product choices for consumers with different needs, Coca-Cola is also actively exploring product innovation and new product development in non-carbonated beverage categories. To date, in addition to carbonated beverages, Coca-Cola has entered the tea beverage series, plant-based protein beverages, bottled drinking water, fruit juice, and ready-to-drink coffee categories. On April 26, Coca-Cola officially confirmed its strategic investment in Le Chun, and the two parties will actively explore strategic cooperation in product innovation, digital innovation, and brand incubation innovation. This move indicates that Coca-Cola has extended its layout in the Chinese market to the yogurt category, once again demonstrating its determination to accelerate its transformation into a 'comprehensive beverage company'.
  2. Digital Market Channel Construction At the market channel level, Coca-Cola is also actively cooperating with emerging e-commerce platforms such as B2C and B2B. On June 25, Coca-Cola China, COFCO Coca-Cola, and JD New Channel signed a strategic cooperation agreement at Coca-Cola China's headquarters in Shanghai. In the future, Coca-Cola will cooperate with JD New Channel in areas such as direct delivery from manufacturers, joint upgrading of traditional grocery stores, and building a big data monitoring platform for FMCG. In addition, Coca-Cola has also established strategic cooperation with multiple B2B platforms such as Zhongshang Huimin, Meicai, and China Post Youlego to achieve full-channel coverage of its products. At sales points without business personnel, Zhongshang Huimin can effectively help Coca-Cola improve basic execution at sales points and drive the market distribution of main products; Meicai and China Post Youlego can help Coca-Cola achieve coverage in catering channels and low-tier rural markets, thereby increasing the market presence of key products.
  3. Marketing Innovation As a century-old brand, although carbonated beverages have been labeled 'unhealthy' by more and more consumers, Coca-Cola is very adept at using various marketing methods to build different consumption scenarios to regain recognition among younger consumers, even making its brand synonymous with a lifestyle. From clothes, shoes, and lighters to beauty products, Coca-Cola has injected new colors into its brand development direction through co-branding with other brands, and to some extent, has rekindled its appeal to younger consumers. At the marketing level, Coca-Cola's attempts to get more consumers to pick up Coca-Cola again by building consumption scenarios are also worth mentioning. For example, the wristband bottle and digital bottle launched during the World Cup are typical examples. During the World Cup, Coca-Cola's bottle packaging color bands transformed into wristbands of different colors, corresponding to different national teams. Consumers could tear off the wristbands to support their favorite teams, enhancing audience participation and interaction. At the same time, Coca-Cola conveyed the collective sense behind the wristbands through different packaging. In addition to the wristband bottle, Coca-Cola also launched a 330ml score can. Through such scenario-based marketing, Coca-Cola has undoubtedly attracted countless young consumers, injecting new vitality and energy into its brand. For other brand owners, the product life cycle theory is unavoidable, but how to reshape brand value and keep the brand image youthful through product innovation, marketing innovation, and channel innovation, like Coca-Cola, is a question that tens of millions of FMCG marketers in China must consider. From August 22 to 24, the '2018 China Digital Innovation Conference (2018FDIC)', hosted by the China FMCG Industry Association and organized by New Distribution, with the theme 'Finding New Engines for Growth', will be held in Shanghai! The conference will last for three days, focusing on two main themes: marketing and supply chain, with six parallel forums on brand, channels, communication, B2B, same-city logistics, and innovative retail. We will invite industry experts, CEOs, and senior brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry. We will invite more than 500 senior executives from FMCG companies, 200+ CEOs from B2B industries, and 1000+ major FMCG distributors to gather together to discuss how the FMCG industry can use digital tools to achieve rapid growth again in the digital era. This conference will build a bridge for brand owners, distributors, retail enterprises, and marketing agencies, helping FMCG manufacturers obtain the latest information, understand best practices, and master more transformation practical skills. Proposed Invited Companies Conference Time August 22-24, 2018 Conference Venue Shanghai Baohua Marriott Hotel Conference Content August 22: Full-day check-in Afternoon 14:00-17:30 Parallel Forum on Distributor Same-City Logistics Evening 18:30-21:00 New Distribution Night Gala Dinner August 23: Theme: Marketing Digital Innovation Morning 9:00-12:00 Main Forum on Marketing Digital Innovation Afternoon 14:00-17:30 Parallel Forums on Brand, Channels, and Communication August 24: Theme: FMCG Supply Chain Digital Upgrade All day: FMCG Supply Chain Conference Registration Method Registration is now open. Long press the QR code below or click 'Read Original' to register. The 50% discount special offer is on the last day, so sign up now...! Registration Consultation Ticket Inquiries: Media Cooperation Inquiries: Highlights of Previous New Distribution Conferences Click the links below to review the highlights of the 1st, 2nd, 3rd, and 4th FMCG + Internet Conferences: -END-