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Coca-Cola Great Britain (UK)

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Responsibility for Coca-Cola and its sister brands in the UK is shared between two strategically linked but financially separate companies. Coca-Cola Great Britain is the local subsidiary of the Coca-Cola Company and is responsible for marketing and overall management of the American group's local brands, under the umbrella of regional group Coca-Cola North West Europe & Nordics. However, manufacturing, sales and distribution are all managed by an independent company, Coca-Cola European Partners, formed in 2016 from the merger of what were previously three separate bottling companies in Europe. Coca-Cola Company has a large minority shareholding.

Advertising

Click here for agency account assignments for Coca-Cola GB from Adbrands.net. Ebiquity (for The Grocer) estimated total spend of £37m in 2015 and ranked the top spending brands as Coca-Cola (£17.1m), Diet Coke (£5.6m) and Coke Zero (£4.2m). Virtually all local marketing activity in Great Britain is purely promotional or activation-based. Very little advertising is now commissioned locally in Britain, but developed centrally and adapted as necessary for the UK market.

Competitors

See Non Alcoholic Beverages Sector index for other companies and brands

Brands & Activities

Coca-Cola Great Britain markets a broad range of the parent group's leading international brands including the Coke family, Fanta, Sprite, Powerade and Glaceau Vitaminwater. It has owned the Schweppes mixers range in the UK (but not elsewhere in Europe) since 1998, and this portfolio now includes local mineral water Abbey Well, originally acquired by Coca-Cola in 2008 and more recently transferred into the Schweppes portfolio. (Another British mineral water, Malvern, was discontinued in 2010, and attempts to establish a larger presence in bottled water were more or less abandoned after a disastrous reception to the Dasani brand in Europe in 2008). In 2013, Coca-Cola Great Britain arranged to acquire all the shares it didn't already own in juice and smoothie company Innocent Drinks, which continues to manage its own marketing, manufacturing and distribution.

The acquisition of what was then Cadbury Schweppes' UK drinks business in 1998 also brought with it other brands including local rights to Dr Pepper and still fruit drink Oasis. Other local or European-only products include carbonated tropical drink Lilt, blended juice range 5 Alive, Kia Ora concentrate squash, and energy drink Relentless.

Working in partnership with Coca-Cola Great Britain is the local arm of what was previously Coca-Cola Enterprises. Until 2010, CCE was the world's largest bottling company, responsible for manufacturing and distributing the Coca-Cola portfolio in much of the US and Canada as well as Europe. Its cooperation was secured through a minority shareholding by Coca-Cola itself. In 2010, however, CCE was split up, with Coca-Cola acquiring full control of all its North American operations. The company was left with rights to several European markets, becoming entirely independent, though tied by a long-standing contract. As a result, CCE manufactured and distributed all of the Coca-Cola Company's products in the UK under contract, as well as a small portfolio of other complementary drinks. 

Ina  new development though, three of the world's biggest Coke bottlers announced plans in 2015 to merge to create a massive giant whose operations cover most of Western Europe. CCE acquired its counterparts in Germany and the Iberian peninsula to create a new pan-European group with sales of around €11bn, Coca-Cola European Partners. Completion was in summer 2016. Coca-Cola Company is the largest shareholder with around 18% of equity.

CCEP manages another juice brand, Capri-Sun, on behalf of German owner Rudolf Wild, and managed Ocean Spray cranberry juices from 2010. It relinquished that contract in 2014 to Gerber Soft Drinks. It has a similar arrangement for sparkling apple juice Appletiser (actually owned by a subsidiary of SABMiller) and energy drink Monster. In 2012, CCE developed and manufactured a new fruit-based soda for sale exclusively through all UK branches of McDonald's under the name Fruitizz.

According to figures from Nielsen for 2014, Coca-Cola Enterprises was the dominant soft drinks company in the UK, with total annual sales at retail worth approximately £3.82bn. The largest proportion of this is derived from the "take-home" market, representing sales of finished products through supermarkets and other retailers. That segment generated sales of £2.02bn for CCE in 2014, equivalent to 27% market share. That was more than twice the sum generated by its biggest rival Britvic, the local PepsiCo licensee.

The Coca-Cola family was the overall #1 take-home brand in 2015 with sales worth almost £1.15bn (Nielsen, The Grocer). However sales have been steadily as a result of brutal price competition in the grocery market and the public backlash against sugar in soft drinks. The 2015 total was down by almost 3% for the second consecutive year. Regular Coke accounted for sales of £630m in 2015 (IRI), but that figure was down by over 4%. Diet Coke for a little over £430m, also down 4%, and Coke Zero for £90m. Stevia-sweetened Coca-Cola Life generated sales of a little over £20m in its first year on-sale. However, sales have steadily declined since then, and in 2017 the variant was finally withdrawn from sale.

Innocent's range of fruit juice and smoothies was the group's second largest brand, contributing retail sales of £211. Some way behind came the Schweppes family of soft drinks and mixers, contributing an additional £129m, just ahead of Monster at almost £127m, an increase of 15% on the year before. Capri-Sun generated £92m. Fanta, Dr Pepper and Oasis and all other brands were all below that figure.

The other major retail battleground is what is called in the UK the "on trade", which denotes pubs, bars, restaurants and other establishments where drinks are consumed "on the premises". CCE is now the local leader ahead of traditional rival Britvic, which assembled an extensive exclusive network during the 1980s and 1990s as a part-subsidiary of local brewers and pub-owners Bass and Whitbread. In 2014, the on trade contributed an additional £1.8bn in sales for CCE, equivalent to 43% share, ahead of Britvic at 38%. Coke and Diet Coke were the #2 and #3 brands in this segment, positioned between Pepsi and Diet Pepsi respectively. Schweppes juices and Schweppes lemonade battled with Britvic's equivalent products lower down the ranking.

In its statutory accounts for 2014, Coca-Cola Enterprises Ltd of the UK reported turnover of £1.76bn, and net profit of £220m. 

Like all UK-based soft drinks companies, Coca-Cola is preparing for the introduction of a "sugar tax" from April 2018. Under this legislation, soft drinks with more than 5g of sugar per 100ml will be taxed at a rate as yet to be decided. Expectations are of 18p per litre from 5g to 8g of sugar and 24p per litre over 8g. The rate will either be absorbed by manufacturers, or more likely passed on to consumer in price rises. At current sugar levels, Fanta, Sprite and Dr Pepper fall into the lower tier, while regular Coke is in the high tier.

Coca-Cola Great Britain underwent a full restructuring in 2010, when it was combined with other country-specific operating units under the umbrella of a new multi-territory unit, Coca-Cola NW Europe & Nordics. The footprint of that business matches the territories served by the slimmed-down CCE.

Last full revision 25th November 2015

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