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The North America operating segment is our Company’s flagship business and its largest source of total unit case volume. Throughout the year, our Company and its bottling partners remained focused on maximizing value through a balanced price and volume approach
and on integrating our operations into a single unit. Due to a decrease in restaurant traffic in the early part of 2003 and soft performance in our juice and juice-drink business, operating results came in below our expectations. In 2003, we generated
$6.3 billion in net operating revenues and delivered unit case volume growth of 2 percent as compared to 2002.
Coca-Cola branded beverages continued to outpace the cola carbonated soft-drink category, achieving increases in volume share led by full-year sales of Vanilla Coke and diet Vanilla Coke and a strong performance by Diet Coke. The Company’s
new marketing platform, Coca-Cola “Real,” enhanced the image of the brand, most notably among teens and young adults—reinforcing an honest, genuine connection with consumers. Coca-Cola “Real” came alive during 2003 through television advertising featuring real-life
connections, our partnership with the highly successful second season of American Idol, and cokemusic.com—where more than 2 million consumers visit every month to chat, play games, create their own music, bid for music-related merchandise and read the latest news about today’s music.
Sales of Sprite branded beverages increased with a new twist on consumers’ favorite lemon-lime soft drink. Tropical Sprite Remix drove growth and helped reconnect the Sprite trademark with its young, urban consumer base.
POWERADE continued to gain share and delivered strong unit case volume growth of 21 percent in 2003. We created excitement for bottling partners and retailers by customizing flavors and packaging tied to The Matrix motion picture franchise and to
the National Hot Rod Association.
In the first full year since the creation of our water joint venture with Danone in the United States, the Company began to see benefits from its three-tier water strategy. Dasani volume grew 16 percent in 2003, with the brand maintaining its price
premium relative to the category and competitive brands.
As consumers look for more choices and enhanced benefits from the beverages they choose, our Company is well-positioned to satisfy their needs. Simply Orange, our “closest to the tree” not-from-concentrate orange
juice, is now available throughout the United States. We expanded the Minute Maid Premium orange juice line in 2003 by introducing the first orange juice fortified with calcium and vitamin D across the United States. We also introduced Heart Wise—the first orange juice launched throughout
the United States containing plant sterols, which have been clinically
proven to help reduce cholesterol. Our bottler-delivered products also continued to experience strong growth through expanded distribution and through new products such as Minute Maid Limeade/Limonada and Swerve, a milk-based beverage created for the education channel.
The North America operating segment continued to work with its bottling partners to execute package and price strategies that strengthen their financial results, deliver value for customers and provide consumers with choices that meet their needs.
The functional benefits brought to consumers by Fridge Pack, now available in 91 percent of supermarkets in the United States, continue to help build volume for our brands. And, where available, re-sealable 24-ounce six-packs and .5-liter bottles have generated incremental growth.
During 2003, the Company took significant steps to create an organizational structure responsive to the needs of customers and consumers by integrating our North America bottle/can, fountain and juice businesses into a single operating unit. This
new structure better reflects the way beverage choices are made, unifies our procurement and supply chain systems to increase efficiency and eliminate redundancies, and links our go-to-market activities with those of our bottling partners so that our system can deliver value-added services to our
customers faster and more effectively. The new Retail Sales and Foodservice and Hospitality divisions are already producing real benefits, including lower system costs, better bottler and customer alignment, and increased ability to provide consumers with value. |
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