With 129 leading brands produced in 49 bottling plants, Coca-Cola FEMSA is the largest franchise bottler of Coca-Cola products in the world by volume.

In 2019, Coca-Cola FEMSA continued to consolidate a leading total beverage portfolio with options for every consumer taste and lifestyle. We succeeded in deploying diverse strategies to create value and produce positive results. More importantly, we took significant steps forward on our ongoing transformation into a stronger and more resilient business.

Amidst dynamic macroeconomic conditions in Latin America, we continue to successfully adapt to ever-changing landscapes. Coca-Cola FEMSA has a clear objective to continue growing profitably and sustainably by capturing opportunities to create value for our stakeholders.

We launched a set of new initiatives in 2019 to increase agility and efficiency across our organization—always with a central focus on putting the needs of our customers and consumers first. By leveraging our portfolio and affordability initiatives, we saw strong top-line performance in the markets where we operate, as a result of our continuous progress, positive momentum, and encouraging market trends throughout the year.

Further underscoring our ability to navigate challenging environments, in 2019 our volume grew 1.4% to 3.4 billion, transactions growing 2.5% to 20.2 billion, total revenues grew 6.7% to Ps. 194.5 billion (US$ 10.3 billion) and operating income grew 3.0% to Ps. 25.4 billion (US$ 1.3 billion).

Consumer focus
Driven by an obsessive consumer focus within our business strategy, we are constantly reinforcing our motivation for success, growth, and profitability. With this relentless emphasis on maximizing value for our customers, we are always thinking about new and unexpected ways to fulfill their beverage needs. In 2019, we achieved this in multiple categories through affordability initiatives and portfolio innovation.

AFFORDABILITY
We continued to roll out affordability initiatives in our markets and territories by expanding our single-serve returnable portfolio strategy and refining the lineup of our offerings. In Mexico, we connected with consumers who are economically resilient but looking for increased affordability. To meet their needs, we identified opportunities to widen the availability of both smaller and larger returnable presentations. To target primarily on-premise consumption, we launched a 235 ml single serve returnable glass bottle for Ps. 5. We also increased coverage of the 3-liter returnable bottle. In addition to adjusting size, we introduced sparkling flavors in Mexico at more affordable prices, including 400 ml presentations of Sprite, Fanta and Sidral Mundet for Ps. 7.

We also successfully applied the affordability strategy elsewhere in Latin America. For example, in Argentina, we rapidly adapted our portfolio to remain close to our consumers. Additionally, our Brazilian operation continued its impressive turnaround despite slow economic growth, which has led to market share gains across our key beverage categories.

PORTFOLIO INNOVATION
To support continued diversification of our portfolio through consumer-oriented carbonated and non-carbonated innovations, we consider consumption occasions across three tiers of price accessibility: affordable, mainstream, and premium. We also continue to satisfy our consumers with low-and no-sugar beverages. We reinforced these focus areas through several key product launches.

• In Mexico, we launched Coca-Cola Con Café and Coca-Cola Energy to target distinct consumption occasions.
• In Brazil, we expanded several affordable and premium sparkling beverages, including Del Valle Fresh, an affordable fruit-based sparkling beverage, and YAS, a premium sparkling beverage with natural sweeteners and flavors. We also launched additional premium offerings by leveraging the Schweppes brand of sparkling waters, club sodas, and tonic waters.
• In Brazil and other markets, we expanded our premium water offerings to include enhanced attributes and flavors, including the purified, electrolyte-enhanced Smartwater, and Crystal, available as either a mineral still water or carbonated option.

Supply 4 Growth: As part of our company´s transformation, we functionalized our key supply chain area to advance, optimize, and standardize our operating models, systems, and processes. We identified operations with the best practices and decentralized our distribution and manufacturing centers of excellence to Brazil and Mexico operations, respectively. Consistent with our vision, we launched our Supply Chain Reinvention initiative to collaboratively and systemically share, adopt, and devise best practices. This is serving to bolster our talent pool and capture new productivity opportunities across the company’s supply chain and throughout our 9 operational centers.

Digital and sustainable
An essential part of the Fuel 4 Growth program is an ongoing strategic focus on our digital capabilities and sustainability commitments.

KOFmmercial Digital Platform: To strengthen our performance and boost our competitive advantage, we continue to focus on developing and deploying next-generation business capabilities through the KOFmmercial Digital Platform (KDP). Backed by advanced predictive analytics and digital distribution capabilities, the KDP supports the development of effective operating models and seamlessly manages dynamic strategic initiatives. This allows us to adapt our business toward technology-driven commerce for our main sales channels and further support consumer and customer engagement. In 2019, we reached 7,600 pre-sale routes in nine countries, including Uruguay and Guatemala for the first time.

KOF DNA
Finally, ubiquitous to our strategy and mindset (as depicted by the outer-most circle surrounding our “One KOF” strategy diagram, page 26), are the values and culture of our organization that are vital for our success: Operational excellence, Owners mentality, People first, and Agile decisions. Internally referred to as our “KOF DNA”, this model guides our people with the tools and capabilities they need to succeed. Recognizing that our people co-create our culture and share responsibility for our company’s transformation, our KOF DNA is helping us to achieve our strategic vision of becoming an undisputed total beverage leader with sustainable and profitable long-term growth.

For more information, please visit:
Coca-Cola FEMSA’s 2019 Annual Report.