Last June 14, Cristiano Ronaldo attended the press conference for Portugal's match against Hungary. As soon as he sat down, he moved two bottles of Coca-Cola away and urged everyone, "Drink water, not Coke." As soon as he said this, Coca-Cola's stock price quickly fell from $56.10 per share to $55.20 per share, a drop of 1.6%. Within half an hour, Coca-Cola's market value evaporated by $4 billion. However, this incident was like a mayfly trying to shake a tree; it could hardly topple Coca-Cola's century-old foundation. Apart from the Ronaldo incident, Coca-Cola, which had not raised prices for decades, also faced price hikes and layoffs over the past two years, yet its revenue and sales volume actually rose. Coca-Cola's 2021 financial report showed that the company achieved revenue of $38.66 billion, a year-over-year increase of 17%, and net operating profit of $10.31 billion, up 15% year-over-year; earnings per share were $2.32, and global unit case volume increased 8% year-over-year, already surpassing pre-pandemic performance. In response, Coca-Cola's Chairman and CEO James Quincey said, "Although 2021 was still full of uncertainties, the entire Coca-Cola system performed well this year, demonstrating strong resilience and high flexibility." In the soft drink market landscape, Jianlibao, PepsiCo, and Coca-Cola have been competing for years, and Genki Forest is gaining momentum, but these beverages are still at a disadvantage. Why does Coca-Cola remain standing? ****Coca-Cola's Price Hike and Layoff Turmoil For consumers, Coca-Cola is not just a sparkling water; after years in the market, it has become a cultural symbol. From its inception, Coca-Cola gained popularity through its secret formula, the red-blue rivalry with Pepsi, and marketing tactics like being closely associated with Santa Claus. To this day, Coca-Cola still dominates the carbonated beverage market. Euromonitor data shows that in 2020, carbonated beverages became the world's largest soft drink segment, holding a 35.2% share, with Coca-Cola holding 14.9% of the global soft drink market, while PepsiCo, Nestlé, and Danone held 7.2%, 2.8%, and 2.0%, respectively. Furthermore, among the top ten beverage brands by sales volume, five are Coca-Cola products, including Coca-Cola, Sprite, Fanta, Diet Coke, and Coca-Cola Zero Sugar, while Pepsi only holds two spots. However, as global consumers become more health-conscious, the carbonated beverage market has declined. When the nest is overturned, how can any egg remain intact? Under this environment, the performance of major carbonated beverage companies has also been affected. In 2016, Coca-Cola achieved revenue of $41.863 billion, which then continued to decline, dropping to $33.014 billion in 2020, an 11% year-over-year decrease from 2019. As a result, Coca-Cola had to implement self-rescue measures such as layoffs and price increases. On August 28, 2020, Coca-Cola announced global layoffs and offered voluntary departure and severance packages to over 4,000 employees in North America, Canada, Puerto Rico, and other regions. At that time, Coca-Cola's second-quarter net profit fell 32%. In response, James Quincey said, "The global economy is expected to take two to three years to recover, and this second quarter will also be the company's most difficult period." On April 20, 2021, after releasing its first-quarter report, James Quincey stated, "We have good hedging measures in 2021, but pressure is increasing in 2022, so prices must rise." On one hand, raw material prices are rising; on the other hand, the overall carbonated beverage environment is not optimistic. Facing internal and external troubles, Coca-Cola's self-rescue measures of layoffs and price hikes seemed like drinking poison to quench thirst, but judging from the 2021 financial report, these actions have achieved significant results. Coca-Cola's Innovation Path **"We have reason to believe that the progress made in our strategic transformation has made Coca-Cola a more agile and flexible total beverage company," James Quincey explained Coca-Cola's strategic layout at the earnings meeting. In fact, Coca-Cola has already entered multiple beverage tracks early on. In September 2021, Coca-Cola and Mengniu's joint venture "Kénil" launched a low-temperature milk product called "Fairlife" (鲜菲乐). This product features "UF purified ultrafiltration technology" and has a shelf life of 28 days, showing strong competitiveness in the market. Moreover, the product is positioned as a "$1 billion" brand. In addition, Coca-Cola launched alcoholic beverages like "Topo Chico" hard seltzer, Japanese lemon sparkling wine "Lemon-Dou," and opened a "Zhibaishuo" (植白说) flagship store on Tmall to sell plant-based beverages, with brands including Cufangwang (粗粮王) and Sunny Everywhere (阳光处处)... These products are expected to enter the market gradually in 2022. In February this year, to attract young consumers, Coca-Cola launched its first space-inspired limited edition product, "Starlight" (星河漫步). The global creative platform behind this product, "Coca-Cola Creations" (乐创无界), will also be launched simultaneously. The product is expected to be available for a limited time in March. Vlad, Senior Director of Global Strategy at Coca-Cola, said, "Through Coca-Cola Starlight, we hope to pay tribute to humanity's extraordinary ability to explore space, inspiring generations of young people to continuously discover new worlds full of possibilities. To achieve this, we hope that with this product, a sip can trigger curiosity and love for the distant galaxy." The hottest concept right now is the metaverse, and every field is trying to leverage it to empower products and get a piece of the pie. We won't discuss whether "Starlight" has any magical effect of connecting with outer space or the distant galaxy, nor do we need to consider the taste of the new product. Just the gimmick is enough to impress; Coca-Cola has indeed unlocked the traffic code to capture contemporary young people. According to Baudrillard's theory of consumer society, people buy a product or service not mainly for its practical value, but to seek a certain feeling or pursue a certain mood. Coca-Cola knows this well. Financial writer Wu Xiaobo wrote in "The Great Defeat" (大败局): "Entering an industry, first specialize, then globalize, that is the only way to make money. " Coca-Cola has followed the path of specialization first and then globalization, leaving competitors far behind. Coca-Cola's Strong Competitors **There is a famous saying in the American business community: "If you can't beat your opponent, join them." Coca-Cola, precisely because of its "lonely at the top" status, has attracted countless competitors to fight. The most famous battle is the century-old red-blue rivalry between Coca-Cola and Pepsi. Coca-Cola has always been the winner in this battle, but in recent years, Pepsi seems to be overtaking on a curve. Coca-Cola positions itself as a total beverage company, and no matter what it does, it never strays from the beverage category. But Pepsi is different; while laying out its beverage business, it has also extended into the food and snack industries. Among them, snacks like Lay's, Cheetos, and Doritos account for nearly 40% of Pepsi's revenue. These expansion moves have become powerful weapons for Pepsi to beat Coca-Cola during the pandemic. In the first half of 2020, Coca-Cola's revenue fell 16% year-over-year, while Pepsi, relying on snacks and food services, saw revenue increase 1.68% year-over-year. From this perspective, diversified business is also urgent for Coca-Cola's strategic transformation. Let's talk about the popular sparkling water brand Genki Forest. Genki Forest went public on February 10 this year with a market value of 14 billion yuan. In 2020, it achieved revenue of 2.5 billion yuan, and in the first half of 2021, revenue was 800 million yuan. In terms of revenue alone, Genki Forest does not pose a significant threat to Coca-Cola. However, compared to its "0 sugar 0 fat" sparkling water positioning, Genki Forest's marketing in China is more well-known. After Genki Forest appeared, it seemed to dominate screens in films, dramas, and variety shows. In terms of variety shows, Genki Forest cooperated with "Dance Student" and "Blast Stage"; in dramas, advertisements for Genki Forest were inserted in multiple TV series such as "The Ideal City," "You Are My Glory," "Hello, Flames," and "Si Teng." Additionally, Genki Forest sponsored Bilibili's New Year's Eve Gala and Jiangsu TV's New Year's Eve Concert, truly resonating with young people. These advantages seem to be lacking for Coca-Cola. Coca-Cola certainly has a century of heritage, but in the internet age, if FMCG companies still operate in traditional models, it will be difficult to retain young consumers. "Even if you give me 10 billion, 20 billion, or even 30 billion US dollars to defeat Coca-Cola, I couldn't do it," said Warren Buffett at the 2012 shareholder meeting. Judging from Coca-Cola's current performance, the saying "Only Coca-Cola can beat Coca-Cola" seems not outdated. As for the future, everything is unknown. -END-