Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC Group
At the start of every year, we take a long, hard look at the previous 12 months and try to capture the key elements that really made a difference to our stakeholders and our performance. This process of reflection is critical to providing as accurate and transparent a picture as possible to those who invest their time, trust and money in our company. “Performance” is always a multi-layered and complex equation of what we have delivered, market events and overall economy. This year, with the pandemic as the context, it was a more complex assessment.
But from the outset, one thing that struck me was the way that our people and our business had adapted: rapidly; with great care for all stakeholders; and with incredible focus on our priorities. I believe that this has been at the heart of our ability to ‘win’ in the last 12 months. It’s clear to me that as consumers and customers demand more, it will be those that can adapt the fastest, and the smartest, that will win.
The World Economic Forum recently highlighted critical thinking and problem-solving among the skills that will be needed in the next five years. These need to be complemented by self-management, active learning, resilience, and agility. I am particularly proud of the ways in which every single part of our business demonstrated these skills over the last 12 months. One thing that struck me was the way that our people and our business had adapted: rapidly; with great care for all stakeholders; and with incredible focus on our priorities. I believe that this has been at the heart of our ability to ‘win’ in the last 12 months.
The more I reflect, the more I realise how far we have come in building this operational agility into our culture over the last few years and the more I realise that sometimes we take things for granted. This crisis has reinforced that the contribution of every single person, no matter job level or job grade, matters and is uniquely precious. It is the contribution and response of every single person that determines our collective success. It is precisely this agility and adaptability that played a critical role in our performance throughout the most challenging year we have ever had.
This organisational shift does not happen by chance. Over the last few years, we have purposefully invested resources in building the core strengths for our business that will accelerate adaptation: an agile mindset; the strongest, broadest, most flexible portfolio in the industry; genuine customer and community partnerships; digital and technical infrastructure; and supply chain resilience. All these elements played a role in our ability to adapt and win in 2020. A great source of pride for us is that we did not lose a day of production across our plants, we maintained service to our customers, and supported our people and our communities throughout.
The strength and breadth of our portfolio allowed us to act with speed to capture new occasions, particularly in a dynamic market environment. And the pandemic certainly accelerated shifts in consumer behaviour, as our homes became the epicentre of our lives and environment for working, socialising and entertainment.
As many of our on-trade customers were forced to close their doors, there was a need to revaluate our channel and marketing strategy. Across our markets, we upweighted support in grocery, convenience, and petro-retail to create new propositions for these growing ‘at-home occasions’, with a particular focus on increasing the relevance of our sparkling soft drinks for screen-time and meal-time.
Coffee is a critical opportunity for us in the coming decade but the prospect of launching in 14 markets in the middle of a global pandemic was never going to be easy. Thanks to the partnerships with our customers and the commitment of our people we were able to adapt and respond to coffee enthusiasts’ needs for a close-to-barista experience in their own homes. We applied the same thinking and creativity to our adult sparkling beverages such as Schweppes combined with the premium spirits product range, we distribute to drive excitement for the “Aperitivo moment” at home. Our Serbian team launched the “Call it a day drink” to establish “a bar-like” experience with perfectly served low/no-alcohol drinks mixed at home for the relaxing moment when people shut down their computer; in Greece we introduced “Cook Like a Master Chef” helping consumers improve their home cooking and drink preparation skills with the same quality and taste as in their favourite restaurant.
Our marketing and commercial teams in partnership with our customers developed a more agile route-to-market; investing in food aggregators and delivery channels to capitalise on the take-away occasion and increasing our online shopper activations with leading retailers. In Switzerland, the team accelerated its free delivery platform Qwell to ensure that beverages could be delivered directly to homes or offices.
Digital also played a key role in our customer support solutions, allowing our field sales teams to focus on more value-adding activities. We revamped our online customer portal, which included the introduction of a digital ordering system and image recognition technology for shelf-scanning. These innovations have made our customers’ lives easier and ensured that we could get our products from warehouse to shelf effortlessly. Throughout the year, our investment in card payment systems for vending machines also facilitated essential ‘contactless’ solutions for our consumers.
We also believe that adaptability means recognising and responding to the concerns of others, a belief that has shaped our support for communities for 70 years. Along with our partners The Coca-Cola Company, our strong community roots meant we were well-positioned to act with speed and compassion. Over four million liters of our drinks were donated to those most-in-need. We adapted our supply chain to develop protective masks, produce hand sanitiser bottles and leveraged our vending solutions to provide PPE, with all proceeds going to charities. On top of this, more than 400 of our people volunteered – everything from product delivery to supporting food banks to partnering with customers to build temporary hospitals. And with support from The Coca-Cola Foundation as a system we were able to donate around $10 million across our territories.
The hundreds of successful examples of how we have adapted through the pandemic is testament to the investment in our people and their strong belief in our shared purpose. Building a fast, sustainable recovery, that creates value for all, will be an incredibly demanding but fulfilling undertaking. With adaptability ‘hard-wired’ into our thinking and our culture, and care for our people and the partners with whom we share our journey, I am convinced we are heading in a winning direction.
