The Coca-Cola Company Announces New Reporting Lines for Costa Coffee and innocent Businesses to Europe Operating Unit

Rhea-AI Summary

The Coca-Cola Company has announced organizational changes effective Jan. 1, 2025, where Costa Coffee and innocent Drinks will report to the company's Europe operating unit. Costa will remain a stand-alone business, while its ready-to-drink operations outside Europe will report through local operating units. Dogadan, a Turkish tea business, will report to Costa's retail business in Europe. The company's investment in Monster Beverage Corp oversight will move to President and CFO John Murphy. The Global Ventures group, established in 2019, will be sunset as part of this reorganization, with financial data for 2022-2024 being recast and made available in early 2025.

Positive

• Streamlined organizational structure potentially reducing operational complexity
• Minimal employment impact with majority of roles continuing
• Better regional alignment for Costa Coffee and innocent with their primary markets

Negative

• Dissolution of Global Ventures segment requiring financial restatements
• Potential short-term disruption during reorganization transition

Insights

Corporate Strategy Analyst

This organizational restructuring represents a significant strategic shift in Coca-Cola's management of key acquisitions. Moving Costa Coffee and innocent to the Europe operating unit makes operational sense given their primary market presence. The streamlining should improve efficiency and decision-making speed by reducing organizational layers.

The move signals increased regional autonomy in managing these brands, which could lead to better market responsiveness and cost synergies. The separation of Monster oversight to the CFO while keeping operations under regional control shows a balanced approach to strategic investments versus operational management.

The timing of this announcement, with implementation set for 2025, allows for proper transition planning and minimal disruption. The commitment to maintain current employment levels suggests this is purely a structural optimization rather than a cost-cutting measure. Investors should expect improved operational efficiency and potentially better growth execution in European markets.

Changes Will Simplify Reporting Structure

ATLANTA--(BUSINESS WIRE)-- The Coca-Cola Company announced today that innocent Drinks and Costa Coffee will report to the company’s Europe operating unit, effective Jan. 1, 2025.

These organizational changes are intended to streamline and simplify the current structure. There are no significant numbers of employment changes, as the vast majority of current roles will continue.

Background

The Global Ventures group was established in 2019 primarily to oversee the company’s ownership of Costa, innocent and Dogadan, as well as the company’s investment in Monster Beverage Corp.

“As we look to our next chapter of growth, we have evaluated how to best set ourselves up for future success with these growth areas, and we believe now is the right time to have them work more directly with our operating units,” said Coca-Cola President and Chief Financial Officer John Murphy.

What’s changing

The following changes take effect Jan. 1, 2025.

• Innocent, a 25-year-old, London-based maker of juices and smoothies, will report to the Europe operating unit. Coca-Cola has had an ownership stake in innocent since 2009. Innocent drinks are sold across Europe.
• Costa will remain a stand-alone business and will report to the Europe OU. Costa is based in London, and the majority of the company’s retail and Express outlets are located in the United Kingdom and elsewhere in Europe. Costa’s ready-to-drink businesses outside of Europe will report through local operating units.
• Dogadan, a Türkiye-based tea business that was founded in 1975 and in recent years has closely collaborated with the Costa business, will report into Costa’s retail business in Europe. Dogadan has been part of Coca-Cola since 2007.
• Oversight of Coca-Cola’s investment in Monster will move to Murphy, while the respective geographies will be responsible for the underlying operations results.

Global Ventures is currently a separate operating segment. Global Ventures will be sunset as part of the reorganization, and the company will issue financials for 2022 through 2024 to reflect the changes. The recast data will be available publicly in early 2025.

About The Coca-Cola Company

The Coca-Cola Company (NYSE: KO) is a total beverage company with products sold in more than 200 countries and territories. Our company’s purpose is to refresh the world and make a difference. We sell multiple billion-dollar brands across several beverage categories worldwide. Our portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Our water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Gold Peak and Ayataka. Our juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS. We’re constantly transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to market. We seek to positively impact people’s lives, communities and the planet through water replenishment, packaging recycling, sustainable sourcing practices and carbon emissions reductions across our value chain. Together with our bottling partners, we employ more than 700,000 people, helping bring economic opportunity to local communities worldwide. Learn more at www.coca-colacompany.com and follow us on Instagram, Facebook and LinkedIn.

Forward-Looking Statements

This press release may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause The Coca-Cola Company’s actual results to differ materially from its historical experience and our present expectations or projections. These risks include, but are not limited to, unfavorable economic and geopolitical conditions, including the direct or indirect negative impacts of the conflict between Russia and Ukraine and conflicts in the Middle East; increased competition; an inability to be successful in our innovation activities; changes in the retail landscape or the loss of key retail or foodservice customers; an inability to expand our business in emerging and developing markets; an inability to successfully manage the potential negative consequences of our productivity initiatives; an inability to attract or retain a highly skilled and diverse workforce; disruption of our supply chain, including increased commodity, raw material, packaging, energy, transportation and other input costs; an inability to successfully integrate and manage our acquired businesses, brands or bottling operations or an inability to realize a significant portion of the anticipated benefits of our joint ventures or strategic relationships; failure by our third-party service providers and business partners to satisfactorily fulfill their commitments and responsibilities; an inability to renew collective bargaining agreements on satisfactory terms, or we or our bottling partners experience strikes, work stoppages, labor shortages or labor unrest; obesity and other health-related concerns; evolving consumer product and shopping preferences; product safety and quality concerns; perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage products or packaging materials; failure to digitalize the Coca-Cola system; damage to our brand image, corporate reputation and social license to operate from negative publicity, whether or not warranted, concerning product safety or quality, workplace and human rights, obesity or other issues; an inability to successfully manage new product launches; an inability to maintain good relationships with our bottling partners; deterioration in our bottling partners’ financial condition; an inability to successfully manage our refranchising activities; increases in income tax rates, changes in income tax laws or the unfavorable resolution of tax matters, including the outcome of our ongoing tax dispute or any related disputes with the U.S. Internal Revenue Service (“IRS”); the possibility that the assumptions used to calculate our estimated aggregate incremental tax and interest liability related to the potential unfavorable outcome of the ongoing tax dispute with the IRS could significantly change; increased or new indirect taxes; changes in laws and regulations relating to beverage containers and packaging; significant additional labeling or warning requirements or limitations on the marketing or sale of our products; litigation or legal proceedings; conducting business in markets with high-risk legal compliance environments; failure to adequately protect, or disputes relating to, trademarks, formulas and other intellectual property rights; changes in, or failure to comply with, the laws and regulations applicable to our products or our business operations; fluctuations in foreign currency exchange rates; interest rate increases; an inability to achieve our overall long-term growth objectives; default by or failure of one or more of our counterparty financial institutions; impairment charges, and risks regarding potential additional impairments; an inability to protect our information systems against service interruption, misappropriation of data or cybersecurity incidents; failure to comply with privacy and data protection laws; evolving sustainability regulatory requirements and expectations; increasing concerns about the environmental impact of plastic bottles and other packaging materials; water scarcity and poor quality; increased demand for food products, decreased agricultural productivity and increased regulation of ingredient sourcing due diligence; climate change and legal or regulatory responses thereto; adverse weather conditions; and other risks discussed in our filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2023, and subsequently filed Quarterly Reports on Form 10-Q, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241101498634/en/

Investors and Analysts: Robin Halpern, koinvestorrelations@coca-cola.com

Media: Scott Leith, sleith@coca-cola.com

Source: The Coca-Cola Company

FAQ

When will Coca-Cola (KO) implement the new reporting structure for Costa Coffee and innocent?

The new reporting structure will be implemented on January 1, 2025, when Costa Coffee and innocent will begin reporting to Coca-Cola's Europe operating unit.

How will Coca-Cola (KO) handle Costa's operations outside Europe under the new structure?

Costa's ready-to-drink businesses outside of Europe will report through local operating units, while the main business will report to the Europe operating unit.

What will happen to Coca-Cola's (KO) Global Ventures group?

The Global Ventures group will be sunset as part of the reorganization, with financial data for 2022-2024 being recast and made available in early 2025.