Highlights in 2019
• Continued improvement in customer satisfaction results and launch of new
customer satisfaction pulse survey
• Improvements in customer coverage, including time spent with customers,
with greater sales force specialisation to enable our 24/7 strategy
• Accelerated use of new technology, including connected coolers, sales force
automation, image recognition and web-based ordering
• Holistic approach to building growth capabilities, including revenue growth
management andkey account management, by defining prioritised actions
per capability
Priorities in 2020
• Leverage data and advanced analytics to improve segmented execution
• Step up in indirect partner management and data sharing
• Launch of new business developers’ academy to drive our sales force’s
capability to deliver improved customer service, performance and execution
and ensure successful onboarding for new business developers
• Strengthen our relationship with e-retailers and start deep partnering with
new channels to achieve higher market share online
• Launch of internal validation and certification process to share best practices
and accelerate the development of our prioritised growth capabilities
KPIs
• FX-neutral revenue
growth
• Volume growth
• FX-neutral revenue
percase growth
Stakeholders
Our customers
Shareholders
The Coca-Cola
Company
Risks
• Channel mix
• Geopolitical and
macroeconomic
• Quality
GROWTH PILLAR
WIN IN THE
MARKETPLACE
2
COCA-COLA HBC30
Route-to-market
approach
Our route-to-market approach is about
converting our strategy into excellent
execution at every point of sale. In line
with our improving portfolio, we are
continuously strengthening our route
to market and partnering with our
customers to bring our 24/7 portfolio
into the hands of our consumers faster
and with greater efficiency.
Our targeted and segmented way
ofserving our customers, with an
appropriate level of sales force
specialisation and combined with the
utilisation of new technologies, gives
us a competitive advantage to win
inthe marketplace.
Capturing growth opportunities requires more
than a strong product portfolio. It is equally
necessary to have excellence in execution,
successfully serving every customer through
every outlet for every occasion, 24/7.
Our success is dependent on the success of
our customers. When our customers are able
to generate profits by selling our products,
they demand more products from an
expanded range. Joint value creation is
therefore key to both category and market
share expansion as well as profitable growth.
There are two pillars underpinning our joint
value creation process: our next-generation
customer approach and our industry-leading
commercial capabilities.
Partnering with customers
Our next-generation customer partnership
model allows us to generate powerful insights
from customer data, which supports tailored
execution plans implemented in collaboration
with our partners. We start by commissioning
an annual survey of more than 16,000
customers, comparing ourselves with other
beverage suppliers. This survey allows us to
understand the challenges and opportunities
our customers are encountering, meaning we
can identify how to become better partners
and continue to exceed their expectations.
This approach is helping us to develop
stronger and more productive customer
partnerships and provides a platform for
ustocontinue building these relationships.
As a result of this model, in 2019 we were
recognised as the top supplier for traditional
outlets in three additional countries compared
with 2018. We increased our share of
satisfied customers by 2% to 68.6% in 2019,
and we maintained our high share of satisfied
key account customers at 81%.
We also launched customer pulse surveys
during the year to listen and respond to our
partners’ needs even more frequently. Pulse
surveys allow us to analyse satisfaction levels
by region, channel and outlet segment for a
more targeted response.
To optimise strategies undertaken together
with our customers, we are developing
morepowerful analytic tools to assess
commercial decisions and better understand
the investment and returns required.
Ourcustomers are also developing their
ownofferings.
The HoReCa channel remains a key focus,
asit is pivotal in driving premiumisation and
building the right consumer experience
around our brands. We leverage the expertise
of our centres of excellence in Croatia and
Greece to build a shared value proposition,
provide a bespoke service to our customers
and capitalise on available synergies.
Prioritising critical capabilities
forgrowth
The second pillar underpinning our growth is
our industry-leading commercial capabilities.
This includes a game-changing approach to
revenue growth management, which makes
our business more sustainable and profitable,
and excellent sales execution, which lets us
offer the right range of products and
servicesto our customers while remaining
cost competitive.
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INTEGRATED ANNUAL REPORT 2019 31
By improving revenue growth management,
we aim to maximise value from every
transaction. Our new revenue growth
management framework, developed in
partnership with The Coca-Cola Company,
makes better use of big data and advanced
analytics, giving us deep insight across
different channels, customers and types
ofshoppers. This has led to fundamental
changes in planning, and it empowers our
markets to make the right strategic decisions.
In the last few years, we have continued
toexpand our portfolio and make it more
consumer centric, along with an increased
focus on consumer occasions. At the same
time, we have striven to improve category
and package mix, focusing on portfolio
premiumisation, brand stratification and
growing sales of single-serve packages.
These are all crucial to our revenue
growthapproach.
As an example, in Russia we created a plan
toaddress the challenges of low per-capita
consumption and overall affordability of
Coca-Cola products, combining consumer
insights, pack-price architecture and
promotions to create a compelling customer
selling story. One specific initiative was the
launch of a 900ml package size, which
successfully contributed to sales growth.
In Italy, we have successfully used pack-price
architecture to reverse declines in the
sparkling category and dilution of customer
margins. We launched several new packs
including a 660ml PET bottle with a €1 price
point as well as a new, smaller, 450ml pack for
on-the-go occasions. In addition, we
supported new multi-packs with value-based
promotions. These moves helped us unlock
opportunities for smart pricing which led to a
return of sparkling category value growth in
the market.
As our Revenue Growth Management
approach is analytically intensive, it requires
the right tools to be supported by our
systems. To embed this model, we have
equipped our business units with various
analytical tools which are fully integrated
withour digital environment. Our business
developers can now use advanced pricing
and assortment optimisation tools which
areallowing us to make the right
strategicdecisions.
Leveraging technology for better
execution
Our route-to-market approach converts our
strategy into excellent execution at every
point of sale. These efforts are increasingly
segmented, with implementation plans for
almost 300 initiatives across our markets.
Increasingly, new technology frees up time
needed by our sales force to focus on
channel and product specialisation.
We have equipped our sales teams with a
sales force automation tool, which helps our
people provide the very best service quality.
This platform uses a range of customer data,
including from connected coolers,
suggesting activities with the biggest impact
for each customer visit, and recommending
products and quantities to be ordered whilst
reducing administrative tasks.
We have increased our investment in coolers
over the past few years. Our cooler coverage
reached 87% of our top customer outlets by
the end of 2019, amounting to 1.43 million
coolers, of which 28% are energy-efficient.
This investment serves to drive immediate
consumption and increases revenue per
case. At the same time, we are building a
network of connected coolers, which are now
present in all of our 28 markets. This
technology automatically keeps track of
inventory and supports promotional
messaging to consumers within close range.
In order to improve our in-store execution we
have deployed image recognition
technology. In Italy for example, our
customers are incentivised through a loyalty
scheme to perform image recognition in our
coolers, ensuring the right presence for all
our product categories.
In 2019, we launched Coca-Cola Hellenic’s
first service brand, Qwell by Valser, for
delivery in Switzerland. The project includes a
web-based ordering platform and app, and
we have doubled the number of products
available since 2017. This effort is supported
by a cross-system team, in partnership with
The Coca-Cola Company, and supports
brand launches to fuel growth.
In 18 of our markets, we have improved
online ordering and self-service functionality
for customers with a solution that fully
integrates SAP platforms with Coca-Cola
HBC back-end systems. This streamlines
both ordering and processes for cooler
servicing, financial claims and order tracking.
In 2019, we expanded this solution to a total
of 12,000 customers. In 2020, our focus is on
expanding the rollout of this solution to
additional markets and further improving
customers’ online shopping experience with
options for email marketing campaigns and
product proposals.
Win in the marketplace continued
UN Sustainable
Development Goals
As we build our business by
helping our customers to grow
and thrive, we make substantial
contributions to the
achievement of the Sustainable
Development Goals related to
ending poverty, decent work,
sustainable communities,
responsible production,
justiceand strong institutions,
and partnerships.
32 COCA-COLA HBC
By offering a broader portfolio, with a wider
choice of products, we grow our business
and those of our customers. In established
categories, new recipes, variants and
packages are having a strong impact, while
initiatives for new categories are the basis for
long-term success.
With every initiative, we are focused on
growing the value of our portfolio. For
example, Coca-Cola Energy yields four
timesthe net sales revenue per unit case
compared to the non-alcoholic ready-to-
drink average. For our customers, this
represents increased revenue incremental
tothe overall energy category.
Additionally, we have launched an internal
innovation platform with 6,600 employees
currently engaged in the scheme. This is a
hub for our employees to share their ideas,
and so far, we have generated more than
4,700 ideas.
We also engage with external parties in our
quest for innovation, partnering with leading
universities and start-ups.
Big data and advanced analytics
As we seek to become more innovative and
customer-centric, we are leveraging our data
and investing in advanced analytic tools to
identify and capture value creation and
improve our service and operations.
In Nigeria, where trade is very fragmented,
advanced analytics have given us the ability
tosegment our outlets to the same degree
we had previously achieved in our other
markets. This allows us to have different
activations for different outlet segments,
addressing different drinking occasions. In
Lagos, for example, we were able to target
the Easter occasion in outlets near major
churches, with additional premium products
in more affluent areas.
We aim to build and sustain this critical
capability as a long-term competitive
advantage.
Data and advanced analytics techniques are
also supporting our segmented execution
model, providing suggested activities to our
sales force, including recommended orders
with specific products and quantities to
minimise out-of-stock incidents.
Building customer-centric
capabilities
To improve our efforts to partner with our
customers to drive mutual revenue and profit
growth, we have developed a new framework
for end-to-end customer management.
Weare also training and developing the next
generation of key account leaders as we
continue to evolve into an even more
customer-centric business.
To accomplish this, we have put in place a
robust programme of training backed by a
targeted development centre to address skill
gaps and ensure our people have the right
capabilities to take our customer partnerships
forward. As an example, we are setting up
dedicated negotiation rooms in each market
for our teams to practise and build their
negotiating skills, ready to meet our
customers’ expectations.
We are investing in improving leadership skills
and intensifying the involvement of leaders in
talent development. We have also launched a
simplified people-powered process for
performance and talent management which
incorporates regular feedback from peers
and customers. This is part of our effort to
improve employee experiences, with
increased focus on hiring, onboarding and
career discussions.
Disciplined innovation
As we become the leading 24/7 beverage
partner, we are unlocking growth potential in
segments outside our core sparkling portfolio.
New product launches accounted for 4.2pp
of our volume growth in 2019, the result of
our disciplined approach to innovation.
Sales force specialisation
By segmenting our customers and
introducing dedicated sales teams
specialising in specific channels, we are
unlocking the potential of our 24/7 portfolio.
We start by understanding the total universe
of outlets, defining different service levels
and contact options and optimising
customer visits by channel and segment.
Thisprocess helps us determine the right
level of specialisation so that we deploy the
right number of business developers. In big
cities, we have launched dedicated teams
serving HoReCa key accounts and
wholesalers, as well as ambassadors for
coffee and premium spirits.
Meanwhile, our business developers in rural
areas are responsible for a mix of customers
and products.
In Italy, over half of the beverage revenue in
the country comes from out-of-home
consumption, but just over a third of our
revenues in the market come from this
channel. We have addressed this with a
specialised sales force, supported by digital
prospecting tools, adding 34,000 high
potential outlets to our business developers’
routes. Since we began this approach in
2017, we improved our coverage from 23%
to 51% by the end of 2019.
Our tailored approach for the emerging
e-commerce and at-work channels supports
product cross-selling.
We are pleased with the results we have
achieved, through customer segmentation
and sales force specialisation. Our outlet
coverage was up 6% to 68% in 2019 and time
with customers up 3% in 2019 compared to
the prior year.
“
BY SEGMENTING OUR
CUSTOMERS AND
INTRODUCING DEDICATED
SALES TEAMS SPECIALISING IN
SPECIFIC CHANNELS, WE ARE
UNLOCKING THE POTENTIAL
OF OUR 24/7 PORTFOLIO.“
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33INTEGRATED ANNUAL REPORT 2019