- Coca-Cola is refining its business model to shed manufacturing and distribution operations and instead focus on producing concentrate, a more profitable business.
- After initial plans to retain bottling operations but re-franchise delivery trucks and warehouses fell through, Coca-Cola resolved in September to sell off certain U.S bottling plants and as of last month, them all.
- Coca-Cola anticipates a significant financial impact from the changes, including a decrease in revenue from $44.3 billion in 2015 to $28.5 billion and a jump in operating margin from 23% to 34%. The company's employee count will also drop from 123,000 to 39,000.
Investors' patience with Coca-Cola has thinned in recent years as the company missed profit targets two years in a row, according to The Wall Street Journal. That impatience could position Coca-Cola as an acquisition target in the next few years. Anheuser-Busch InBev is already a rumored buyer.
Additionally, the company has expanded its production of mini-cans and mini-bottles to create more appealing serving sizes for health-conscious consumers. It also recently united its trademark brands under a one brand, product-centric campaign to revitalize consumers' perceptions of Coke's core products. Moves like these demonstrate the company's commitment to evolve in a changing market environment.
Elsewhere, Coca-Cola came out on top in its case against Pom Wonderful, which claimed Coke's Minute Maid pomegranate-blueberry juice misled consumers by containing less than 1% pomegranate. Coca-Cola had discontinued the product in 2014 due to poor sales performance. After nearly a decade of back-and-forth deliberations, the jurors in the case denied Pom Wonderful's demands for $78 million in damages from Coca-Cola. They ruled Pom didn't prove Coca-Cola's marketing was misleading.