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The Europe, Eurasia and Middle East strategic business unit achieved strong results in 2003, both in core brands and in new beverages.
Net operating revenues increased a strong 25 percent to $6.6 billion, due in part to favorable foreign currency trends. Unit case volume increased 5 percent compared with 2002, driven by innovation, strong marketing strategies and favorable summer
weather, and despite the impact of the German deposit law on nonreturnable packages. We made significant progress in the highly profitable immediate consumption packages, resulting in volume gains and increased retail dollar share.
In 2003, we successfully launched Vanilla Coke in 14 countries. We introduced Diet Coke vanilla in Great Britain and Coca-Cola light lemon in eight countries.
Powerful marketing programs for Coca-Cola were led by “Chihuahua,” a highly integrated marketing platform that began in Spain in 2002 and spread quickly throughout Europe in 2003. Television partnerships, DJ tours and packaging promotions
combined to catapult the Chihuahua song to the top 40 in 11 countries, including seven “number ones.”
In Spain, the Company’s Coca-Cola “Movimiento” Web site reached more than 850,000 consumers, each spending an average of 45 minutes a day gaming, networking and competing for prizes.
The Diet Coke/Coca-Cola light family of brands experienced compound annual volume growth of 12 percent between 2001 and 2003, tapping the strong consumer trend for low-calorie products. Marketing efforts have focused on brand and package innovation,
entertainment communication, tailormade promotions and engaging consumers with unique beverage sampling experiences.
After a decrease in volume growth, partially due to the implementation of a deposit law on nonreturnable packages in the first quarter of 2003, our business in Germany began to post quarterly improvement. New packages and initiatives contributed
to growth in the remainder of the year and demonstrated the ability of the Coca-Cola system to adapt quickly to changing conditions. The new deposit law has created a difficult environment for the industry, but the Coca-Cola system remains well-positioned to respond
to German consumers’ preference
for returnable packaging.
Noncarbonated unit case volume increased 31 percent in 2003 compared with the previous year, with expansion into new categories and the profitable acceleration of growth in the Company’s existing business. First launched in Europe in late 2001,
POWERADE unit case volume increased 78 percent compared with 2002, and is now the number-one sports drink in Europe. It has gained strong credibility through high-level sponsorships, including the World Athletics Championships in France, the Rugby World Cup and The Matrix Reloaded movie.
Nestea, re-launched in 2001, enjoyed a 35 percent growth in unit case volume in 2003 and achieved leadership in the highly profitable immediate consumption channel, with new flavors and stylish packaging.
The operating segment’s juice strategy continues to progress, following the re-launch of the Cappy and Minute Maid brands in 2002. And Qoo, already highly successful in Asia, established itself as the number-two youth juice drink in Germany
in 2003.
The Company’s water strategy made significant gains in 2003, with regional and local brands growing in the most profitable immediate consumption channels. Turkuaz achieved category leadership in Turkey, and Bonaqua became one of the leading
water brands in Russia. In 2004, plans call for the Company to launch Dasani in Great Britain, France and Germany.
Along with ongoing steps to strengthen our brands, an organizational restructuring across Europe promises greater efficiency for the business through closer alignment with our bottling partners and already has helped
reduce costs. The new structure has been adapted to meet the future needs of our business, and we believe it is well-positioned to support our continued success. |
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