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+3.5 Points
-0.3 Points -5.6 Points
10 Year Share Growth
Carbonated Soft Drinks3-Year CAGR
Retail Sales
+0.1% +2.1% +2.0% +10.8% +6.2% +9.3%
Soft
Drinks
Manufacturer 1 Manufacturer 2
Source: Share info from May 2018 Beverage Digest Source Book; 3-yr CAGR IRI MULO+C 2016 thru 2018
7 8 10 10 11 12 13 15 16 18 19 2024
2946 47
5 Year TSR distribution of beverage companies1, %
Source: McKinsey Corporate Finance, Company Annual Reports
0.9 35.4 56.4 90.1 9.0 12.1 21.9 63.5 11.0 3.2 1.8 6.7 2.3 3.4 7.6 1.0
1. 2018 TSR 5-year rolling average (including both share price appreciation and all dividends) Note: Peer set excludes large private beverage companies without publicly available financial information (e.g., Red Bull, The Wonderful Beverage Company)
S&P 500
Differentiators of
top performance
▪ Substantial volumetric
organic growth:
inorganic and price-
driven growth alone
usually not sufficient
▪ Significant margin
expansion: price
increases and
operational
improvements both
contribute (e.g., Monster)
▪ Growth from smaller
revenue base: smaller
companies have a higher
probability of outsized
TSR
How are we staying a step ahead…• How we talk to consumers
• How we make marketing less art and more science
• How we operate quickly
“I don’t really drink soda…”
I drink Dr Pepper when I’m really
craving one
I drink Canada Dry on an airplane
When I’m really hungover
When I have a Chipotle Burrito
When I’m binge watching a show with my friends
…Except
I don’t drink soda these days… except when
I feel I need a sweet reward
I’m celebrating my college football team
I need a moment of relaxation
Because, after all, it’s ok in moderation…
Honest contentis the best contentSweet reward was the most honest thing we could say about our product…
We set out to crystallize the connection between Canada Dry and relaxation through an ownable brand character.
We strive to have a holistic measurement strategy:ACTIONABLE DATAWITH PRIMARY/SECONDARY KPIS THAT DRIVE REAL INSIGHTS
CANADA DRY:TWO WAYS IN TO CONTEXTUAL DIGITAL CREATIVE
Platform SpecificNon-Skippable :15
Platform SpecificSkippable :15
GingerventionBumpers :06
Content that “knows where it is” in relation to audience behavior
Content that is tailored toaudience interests and affinities
1
2
DR PEPPER MARKETING RETURN ON INVESTMENT
+76%
+35%
+22%
+18%
2013 2014 2015 2016 2017
+10%
2018Source: KDP Proprietary MROI, Marketing Fusion Analytics
Over recent years, about 70 percent of CPG sector growth has come from small and medium-size brands. Smaller brands are capitalizing on the preferences of Millennials and opportunities from digital marketing.Smaller companies, in aggregate, are nimble and respond fast to market signals.
– McKinsey, 2018
Barriersto speed
• The institution itself
• Lack of passion and ownership
• Fear of failure, fear of change
• Not investing in new ideas
• Legacy processes
• Large group churn
• Analysis paralysis
TOM CHITom invigorated the user experience practice at Google with innovative prototyping and design techniques, dramatically increasing the speed and effectiveness of designers on his team.
• “Every single time you answered a question on any test in any school, there was enough information in the question to be able to actually answer it.
• We’ve been unconsciously programmed into the habit of thinking we should just sit there and think about it whenever a problem arises.
• In truth, we don’t have all the information required to solve most of the problems we face in the business world when we first get the question, so sitting there and thinking about it actually becomes not just inefficient but actively counterproductive.”
Rapidly testing multiple solutions wins
At first, we’d rather have quantity and agility.Then we’ll let the data decide quality.
Piloting ideas framework
OBSERVATION HYPOTHESES IDEASTEST
TO LEARNSCALE
THE STORY
UNCERTAINTY
INVESTMENT
WHAT’S THE SECRET TO OUR SUCCESS?
• Honest about the role we play in the world
• Don’t take ourselves too seriously
• Dynamic breakthrough creative work
• Culture of data driven marketers
• Results orientation w/ speed as a tenet
• Talented agency partners