Richard Withagen

Richard Withagen asked about the strategic positioning of CCEP's various sports drink brands—Aquarius, Powerade, and BODYARMOR—and how the company manages potential cannibalization among them. He also inquired about the primary growth drivers for these businesses, specifically whether distribution gains or innovation are more significant.

Answer

CEO Damian Gammell explained that Aquarius is a niche brand primarily in Belgium and Spain, while Powerade serves as the main sports platform, with plans for continued build-out in functionality, pack sizes, and flavors, aiming to replicate its Australian success in Europe. He noted that BODYARMOR, with its different functionality and ingredients, targets a broader hydration and wellness opportunity, coexisting well with Powerade. Gammell stated that growth drivers are a mix of innovation (e.g., Powerade Zero water, 1-liter packs) and distribution gains, particularly in retail and under-penetrated markets like GB.

Richard Withagen asked about the positioning of CCEP's sports drink brands (Aquarius, Powerade, BODYARMOR) and potential cannibalization among them. He also inquired about the key growth drivers for these businesses, specifically distribution gains and innovation.

Answer

CEO Damian Gammell explained that Aquarius is a niche brand primarily in Belgium and Spain, while Powerade serves as the main sports platform, with ongoing efforts to build its functionality, pack sizes, and flavors, leveraging assets like the FIFA World Cup. BODYARMOR addresses a broader hydration and wellness opportunity with distinct functionality, allowing all brands to coexist in a growing segment. Growth drivers include innovation (e.g., Powerade Zero Water, 1-liter Powerade) and distribution gains, particularly in markets like GB where SKU penetration is lower compared to Australia.

Richard Withagen from Kepler Cheuvreux asked about the metrics used to measure the success of the 'Share a Coke' campaign and the strategic pros and cons of global versus local campaigns.

Answer

CEO Damian Gammell explained that CCEP utilizes both global and local campaigns. For 'Share a Coke,' success is tracked via metrics like display share, distribution, consumption frequency, and brand health. He emphasized its positive impact on single-serve formats, which boosts price/mix and away-from-home channel growth.

Richard Withagen from Kepler Cheuvreux asked about the 'Share a Coke' campaign, inquiring about the metrics used to measure its success and the strategic pros and cons of a global versus a local campaign.

Answer

CEO Damian Gammell explained that CCEP utilizes both global and local campaigns. For 'Share a Coke,' success is tracked via metrics like in-store display share, distribution gains, consumer consumption frequency, and brand health scores. He highlighted that the campaign's focus on single-serve packs was particularly effective in boosting price/mix and supporting away-from-home channel growth.

Richard Withagen from Kepler Cheuvreux asked a two-part question about the energy drink category: the current competitive situation with Red Bull and whether the cost of growth is increasing.

Answer

CEO Damian Gammell described the category as healthily competitive and the fastest-growing NARTD segment. He stated that CCEP aims to grow and take share with Monster. He clarified that the cost of growth is not increasing; in fact, as volume grows, the company gains leverage on its fixed assets, which should improve margins over time.

Richard Withagen asked about the Energy drink category, focusing on the competitive situation with rivals like Red Bull and whether the cost of growth in the category is increasing.

Answer

CEO Damian Gammell described the category as 'healthy competitive,' which drives growth and pushes CCEP and Monster to be at the top of their game with innovation. He stated that the competition is not increasing the cost of growth; rather, higher volumes provide better leverage on fixed assets, which should improve margins over time.