DEVELOP A
FUTURE-READY
PORTFOLIO
Driven by our obsessive focus on our consumers and customers, we aim to grow our core business portfolio, capturing the fair share of Coca-Cola trademark in all markets and channels and achieving the full potential of profitable non-carbonated beverage categories.
Our strategy aims to build a winning, consumer-centric, multi-category portfolio for every occasion by leveraging affordability to drive sustainable beverage growth; capturing new consumption occasions and preferences through portfolio innovation; and consolidating our market leadership in emerging beverage categories—from promising alcoholic ready-to-drink to dynamic still beverage categories—while strengthening our multi-category platform across key markets.
Our customers and consumers are at the center of everything we do. We proactively adapt our portfolio strategies and initiatives to satisfy their evolving preferences and practices, expanding the number of routes and households we serve with our direct-to-home Coca-Cola en Tu Hogar delivery routes; enhancing consumer excitement and engagement through limited-edition releases from Coca-Cola Creations; developing complementary indirect distribution models to increase customer service levels; and improving consumer and customer interaction while increasing our single-serve mix by leveraging popular multipacks, increased cooler coverage, and execution across our markets.
During the year, we introduced limited edition, sequential releases from Coca-Cola Creations, The Coca-Cola Company’s innovation platform, across key markets to enhance consumer engagement. These exciting new creations—featuring gaming-inspired, pixel-flavored Coca-Cola Zero Sugar Byte and the artist Marshmello’s Limited Edition Coca-Cola—enabled us to launch creative new products and experiences successively across physical and digital worlds.
To satisfy evolving at-home consumption occasions and preferences, we continued to expand our home delivery routes to serve the evolving needs of almost 600 thousand households across Mexico. During the year, we not only added over 400 new routes for a total of close to 1,650 home delivery routes, but also integrated our Coca‑Cola en tu Hogar D2C omnichannel platform across 85% of those routes, dramatically expanding our base of monthly digital purchasing customers to over 125 thousand households. Thanks to the success of our D2C model, our home delivery routes are rapidly improving their productivity, average ticket, and sales. For the year, we increased the average ticket by driving the mix of non-jug-water products to over 50%, while continuing to improve our delivery effectiveness and net promoter score. For more information see →D2C Marketplace
Complementing our direct models, we are developing and customizing indirect distribution models to not only increase customer service levels to our small mom-and-pop clients, but also achieve our saturation strategy. This is reflected in the significant growth of our emerging indirect wholesaler and distributor channels. Through a clear segmentation, route to market, and category management strategy—catering to both big and small deposit wholesalers—the wholesaler channel gained 25 million incremental unit cases for close to 15% volume growth year over year. Similarly, our indirect distributor channel generated high single-digit growth year over year, contributing almost 10 million unit cases or 14% of our total volume across the traditional trade channel. We also continued with our distributor transformation and digitalization process, covering around 45% of this indirect channel’s total volume during 2022.
Over the past three years, our Colombian operation achieved historic customer growth of more than 120 thousand clients. Among other strategic initiatives, we accomplished this remarkable growth by expanding our winning consumer-centric portfolio, driving affordability to better serve consumers’ demands, and delivering point-of-sale excellence. Indeed, our Colombia operation significantly increased its score in The Coca-Cola Company’s execution index year over year, while generating double-digit volume growth for the year.
In Mexico, our popular portfolio of multipacks is not only enabling better interaction with our consumers, but also growing our profitable single-serve mix, transactions, and revenues across the modern trade channel. For the year, our multipacks volume grew more than 35%, driving approximately 10% of our incremental volume throughout the modern channel. We tailor our portfolio of six, eight, and 12 multipacks to suit the needs of our customers and consumers—from wholesalers to supermarkets and price clubs. In Mexico’s modern trade channel, our multipacks included brand Coca-Cola, Coca-Cola Zero Sugar, Sprite, Mundet, Fanta, Ciel, Seagrams, and Monster.
Affordability remained an important driver of our sustainable beverage growth. We executed to win in the “away from home” and “at home” consumption occasions thanks to several market initiatives that enabled us to provide our consumers with unmatched affordability. Importantly, we increased our returnable volume almost 25% over the past five years, supported by the successful rollout of our refillable universal bottle. To this end, we continued investing behind this core capability, including more than US$500 million in production lines and returnable bottles and cases over the past two years.
To bolster our returnable strategy, this year we significantly enlarged our refillable capacity and the coverage of our 3-liter returnable PET presentation of Coca-Cola Original. With this launch across seven new cities—including Leon, Queretaro, and Veracruz—this popular affordable multi-serve presentation is now present in 30 cities. We further invested in three new returnable bottling lines with an annual capacity of 50 million unit cases, strengthtening our affordable returnable strategy.
During the year, we launched our 2.5-liter returnable PET universal bottle across multiple new cities. Now covering nearly all of our franchise territory, the universal bottle or botella unica enables us to use the same refillable bottle for our core flavored sparkling beverage and juice brands—from our Fanta, Sprite, and Valle Frut brands to our regional Escuis and Victoria flavored brands. Importantly, the expanded coverage of our refillable universal bottle continued to yield share of sales gains in the cities where it was launched.
This year, we significantly expanded the rollout of our affordable universal bottle to cover more than 60% of the country. This transformational bottling technology enables us to offer affordable refillable PET presentations not only of brand Coca-Cola, but also of our flavored sparkling and still beverage brands to compete more effectively in the market, enabling volume and share of sale increases in the cities where it was launched.
Through our returnable affordability strategy, we continued to consolidate our volume growth and competitive advantage across the sparkling beverage category—growing our household penetration while increasing our returnable volume year over year. For the year, returnable presentations represented close to 160 million unit cases or more than 18% of our sparkling beverage mix. This year, we further capitalized on our new refillable universal bottles to enable flavored sparkling beverage expansion and to improve asset management.
Under our affordability strategy, we continued to regain share and expand our consumer base in the face of Argentina’s dynamic competitive and economic environment. Thanks to our evolving market segmentation strategy—leveraging our integral value proposition and execution excellence—we were able to offer consumers the right product at the right price across diverse socioeconomic segments of our franchise territory, enabling us to improve our household penetration while achieving volume growth year over year.
Through ongoing portfolio innovation, we continue to focus on improving our competitive position and capturing the most value from our beverage brands by closely aligning our portfolio with consumers’ tastes and preferences. Among our initiatives, we continued to drive the growth of our no- and low-sugar portfolio of sparkling beverages to satisfy and stimulate demand for our products—with no-sugar volumes an impressive 30% ahead of our 2019 baseline—while adapting our portfolio to evolving consumer behavior. Notably, the new visual identity and formula of Coca-Cola Zero Sugar outperformed the sparkling beverage category across our territories, growing 23% year over year as we leveraged a consistent value proposition with sampling, innovation, and customer experience initiatives.
The new formula and visual identity of Coca‑Cola Zero Sugar continued to outperform the sparkling beverage category across our Mexico territory. Impressively, Coca-Cola Zero Sugar achieved 20% volume growth year over year. Notably, our focus on increasing consumer contact and transactions also enabled us to achieve double-digit volume growth in the single-serve format this year.
In Argentina, Colombia, and Central America, we capitalized on the reopening of the on-premise channel and the strength of our multipack strategy to recover our single-serve mix, which has increased by more than five percentage points in Argentina and Panama. By leveraging our multipacks, increased cooler coverage, and execution, we look forward to continue growing our single-serve mix across our markets. In Brazil, we also continued to leverage the popularity and household penetration of our convenient, affordable multipacks of Coke and our core flavored sparkling beverage brands—achieving over 28% volume growth year on year. Through our multipacks and other mix initiatives, we reached a single-serve mix of almost 23% this year, exceeding our 2019 baseline by more than 2 percentage points.
In Brazil, Coca-Cola Zero Sugar is winning the consumer choice battle through a consistent value proposition, gaining significant share of sales while generating double-digit volume growth year over year. To achieve this growth, we built on a consistent value proposition with sampling, innovation, and customer experience initiatives—highlighted by the Panini FIFA World Cup Qatar 2022 sticker campaign.
During the year, we continued to build on our leadership position in Uruguay’s zero-sugar beverage market—a benchmark with our company. Harnessing the success of Coca-Cola Zero Sugar, we continued to leverage our consistent value proposition and point-of-sale execution with sampling, innovation, and an enhanced customer experience. Consequently, our zero-sugar formulas continued to outperform, with Coca-Cola Zero Sugar volume an impressive 44% ahead of our 2019 baseline.
This year, we continued to capture market share across emerging still beverage categories—from hydration to energy, tea, and sport drinks. We also strengthened and consolidated our multi-category platform through distribution agreements and pilot programs with strategic partners in certain markets across adjacent categories, prioritizing leading beer, spirits, alcoholic ready-to-drink (ARTD) beverages, snacks, and consumer packaged goods brands. Through our winning strategic partnership model, we are building a one-stop shop for our customers and consumers, while exploring complementary revenue streams that boost our presence, visibility, and share of wallet at the point of sale through targeted cross-promotion and execution opportunities across physical and digital realms.
Bolstered by our Monster brand, we not only achieved record share of sales, but also expanded our share of sales leadership position in Brazil’s fast-growing energy drink segment. Our portfolio of Monster brand energy drinks capitalized on every product—from Monster Energy Green to Monster Mango Loco and Monster Absolutely Zero—to fuel volume growth of more than 26% year on year. Furthermore, our Reign brand delivered important volume growth for the year.
After previously importing Powerade into Uruguay, we successfully began local production of this refreshing sports drink during the fourth quarter of 2022. As a result, we re-launched our 600-ml presentation of Powerade, achieving record share of sales, double-digit volume growth, and better profitability backed by a new marketing strategy within this emerging beverage segment.
Catering to our consumers’ shifting preference to natural, no-calorie beverages, we took portfolio innovation to the next level with the expanded consumer-centric launch of our locally developed formula of Brisa Manzana (Colombian Apple) sparkling water. By leveraging this refreshing proposition, we almost tripled our year-on-year volume growth, while achieving significantly higher share of sales in the country’s competitive flavored sparkling water segment.
After completing the transition of the Heineken and Amstel beer brands to Heineken’s distribution network during 2021, this year we managed to increase the share of sales of our promising new consumer-centric beer portfolio, including Heineken legacy and new beer brands. Notably, Sol beer sales recovered considerably; Kaiser took the lead of the economy segment, achieving significant market share growth; and Eisenbahn Unfiltered won a Gold Medal at the World Beer Awards 2022. Additionally, recently acquired Brazilian craft beer brand Therezópolis achieved record sales volume in the premium segment. We also leveraged our existing long-term distribution agreement with Estrella Galicia, achieving positive performance for the year.
Consistent with our journey to become a total beverage company with drink options for all consumption occasions, we continue to work closely with The Coca-Cola Company to identify and define a broader multi-category portfolio of beverages beyond our traditional non-alcoholic ready-to-drink beverages. Our experience with Topo Chico Hard Seltzer shows consumers are excited to see recognizable beverage brands that they already enjoy enter the flavored alcoholic ready-to-drink space. With the combination of a familiar, beloved brand and a strong distribution and market position, we are confident that consumers will enjoy our emerging portfolio of flavored alcoholic ready-to-drink beverages, including Topo Chico Hard Seltzer (Brazil, Costa Rica, Mexico), Jack Daniel’s & Coca-Cola (Mexico), Lemon-Dou (Mexico), and Schweppes Premium Drinks (Brazil).
This year, we continued to leverage our reformulated portfolio to cater to our Brazilian consumers’ growing demand for refreshing teas. The combination of our cold-fill formula, together with the rollout of Leão brand teas, enabled us to increase our sales volume by over 15% for the year, while increasing our sales to a record share of sales in this fast-growing beverage category. We also achieved significant share of sales and almost 60% volume growth in the profitable sport drinks category year over year. We further capitalized the on the market opportunity in the water segment to drive over 29% volume growth.
Aligned with our vision and enhanced cooperation framework with The Coca‑Cola Company—while leveraging our expanding B2B and D2C omnichannel digital platforms—we continued to roll out new distribution agreements and pilot programs with strategic partners to not only consolidate our multi-category platform, but also test complementary categories, prioritizing leading beer, spirits, snacks, and consumer packaged goods brands in certain markets. For more information on B2B and D2C platforms see →Become our customer’s preferred Omnichannel Commercial Platform We further carried on gathering important insights on the ways in which our partners’ different supply chains operate.
In Brazil, we announced a new distribution agreement with Campari Group on April 19, another step to strengthen and consolidate our multi-category platform with a high-potential leading spirits brand. During the year, we continued exploring complementary revenue streams in Brazil, as exemplified by our announced distribution agreement on July 14 with Grupo Perfetti Van Melle—one of the world’s largest manufacturers of sweet confectionary snacks and chewing gum with global brands such as Mentos and Fruit-tella.
Building on our expanding pilots with leading consumer and personal care brands, we began a pilot beer distribution program in Mexico to strengthen our portfolio’s presence in the traditional trade channel, enabling more customers and consumers to access a broader multi-category portfolio. We expect these pilots will enable us to not only expand our customers’ value proposition, but also obtain necessary learnings and insights to continue advancing towards potential strategic alliances in the future.
At Coca-Cola FEMSA, our consumers are at the center of everything we do. Therefore, we are committed to the responsible marketing of our products. Guided by the principles of transparency, fact-based information, and authenticity, we have a history of aligning our commercial practices with our values and our sustainability and business goals.
As we evolve and respond to consumers’ desires for more choices across categories, we are reducing added sugar while providing more beverages with nutritional benefits; optimizing our mix of products; offering more small packaging choices; and providing our consumers with clear nutritional information.
1. Informed nutritional decisions
To enable our consumers to make healthy informed choices across every one of our operations, our upfront product labels include clear, easy-to-find nutritional content information. Our nutritional labeling strategy is based on providing consumers with clear and complete information in full compliance with applicable regulations in each of the countries we serve. Our aim is to ensure that our consumers are provided with high-quality information.
2. Responsible marketing
As part of our commitment to the wellbeing of our consumers and customers, our advertising adheres to The Coca-Cola Company’s Responsible Marketing Policy and Global School Beverage Guidelines. For instance, as part of the Coca-Cola system, we diligently follow and enforce The Coca-Cola Company’s Responsible Marketing Policy, and we respect the role of parents and caregivers by not marketing directly to children under 13. For more information see →The Coca-Cola Company’s Responsible Marketing Policy.
3. Highest quality
Our production processes fulfill the highest quality standards; our ingredients comply with each of our operations’ local regulations and international standards of other regulatory agencies, including CODEX, FDA, JEFCA, and EFSA. Our processes are performed in state-of-the-art bottling facilities within the global beverage industry—all FSSC 22000 certified—thus guaranteeing only the best quality products for our consumers.
