of the launches in our portfolio are low- or no-sugar beverages
0%
of global electric energy needs met through renewable sources
+0 million
accumulated beneficiaries
of our Healthy Habits programs
Ps. +182 billion
in total revenues
+3.3
billion unit cases
290
million people served
in 10 countries
2020 goals:
Reduce the carbon footprint of our value chain by 20% against the 2010 baseline
237
New beverage launches in 2018
of the launches in our portfolio are low- or no-sugar beverages
0%
of global electric energy needs met through renewable sources
+0 million
accumulated beneficiaries
of our Healthy Habits programs
Ps. +182 billion
in total revenues
+3.3
billion unit cases
290
million people served
in 10 countries
2020 goals:
Reduce the carbon footprint of our value chain by 20% against the 2010 baseline
237
New beverage launches in 2018
In 2018, we continued to build on our winning portfolio of beverages, transformed and strengthened our operational capabilities, and evolved our corporate culture in order to deliver greater value for all stakeholders.
Despite a challenging market environment in 2018, our strong strategic vision and framework steered performance to deliver positive results. Operational efficiencies and innovations combined with strategic acquisitions drove this positive performance, which underpins our expected trajectory of continued, long-term business expansion. In addition to our focus on fostering a unified corporate culture, we are also integrating a growing emphasis on sustainability and proactive environmental management into our business strategy.
Our strong strategic vision and framework allow us to create shareholder value over the short and long term.
Our flexible approach and effectiveness at adapting to different markets has resulted in strong performance for Coca-Cola FEMSA across the ten countries where we are present. For example:
Consistent Winning Portfolio Build-up
In 2018, we continued to strengthen our winning portfolio of beverages, offering consumers diverse choices encompassing sparkling beverages, juices, isotonic sports and energy drinks, teas, water, dairy products and plant-based beverages. We maintained or expanded our market share by offering an affordable entry price point, presenting a multi-serve packaging portfolio, leveraging our digital platforms and achieving exemplary point of sale execution.
50%
In 2018, we sold our 51 percent controlling stake in Coca-Cola FEMSA Philippines, Inc. after more than five years of a successful turnaround of this operation. Our Board of Directors determined that exercising the put option and selling our stake back to The Coca-Cola Company was the best course of action for our shareholders, given the evolution of the country’s business outlook and our commitment to a disciplined capital allocation process. Going forward, we will continue to assess other potential strategic opportunities for long-term value creation.
Consistent Winning Portfolio Build-up
In 2018, we continued to strengthen our winning portfolio of beverages, offering consumers diverse choices encompassing sparkling beverages, juices, isotonic sports and energy drinks, teas, water, dairy products and plant-based beverages. We maintained or expanded our market share by offering an affordable entry price point, presenting a multi-serve packaging portfolio, leveraging our digital platforms and achieving exemplary point of sale execution.
Our KOFmmercial Digital Platform and Digital Distribution network helped boost performance.
To better serve consumers across our markets, we seek to anticipate and respond to their evolving preferences. In 2018, we strenghtened our portfolio by introducing innovations that offer diverse beverage options that support people’s lifestyles. For example:
We consolidated our plant-based AdeS brand and we strengthened the coverage of our Monster brand in Argentina, Brazil, Central America, Colombia, Mexico and Uruguay.
Ensuring Product Affordability
To better serve consumers in light of challenging macroeconomic environments, we continue to roll out affordability initiatives across our operations. A key strategy in providing the right beverage choice at the right price for every consumer is returnable plastic and glass packaging.
In 2018, we strengthened our single-serve returnable portfolio across markets, improving revenue and our competitive advantage. In addition, we expanded returnable multi-serve packaging options for Coca-Cola in Mexico, and introduced innovative packaging with increased coverage for 2-liter multi-serve returnable plastic bottles in Brazil, Colombia and Guatemala.
Our Magic Price Points strategy also allows us to intensify our connection with consumers. This approach helps ensure affordability of our single-serve portfolio by offering to purchase a beverage for the value and convenience of a common coin or bill, helping to improve consumer segmentation through revenue management, increase profitability and gain or maintain market share in countries including Argentina, Brazil and Colombia.
Sustainability:
Toward a World Without Waste
The convenience of food and beverage packaging is an important part of modern life, and its proper handling throughout the value chain is of utmost importance. Because of this, since 2002, Coca-Cola FEMSA has collaborated with other food and beverage companies through ECOCE, a Mexican Civil Association that promotes the collection of waste, the creation of a national market for recycling, and the development of recycling programs. We are leaders in PET bottle-to-bottle recycling in Latin America. In 2005, we joined efforts in Mexico to operate the first Food Grade PET Recycling Plant in Latin America, called IMER (or the Mexican Recycling Industry in English). Through these ongoing efforts—together with our leadership in the use of recycled resin in our packages now of 21%, we are on track to achieving our goal of reaching 25% by 2020. We are pleased to join forces with The Coca-Cola Company through the “World Without Waste” initiative to multiply our impacts across the territories we enjoy the privilege to serve in Latin America for the benefit of our communities and to fulfill our 2030 vision of collecting and recycling the equivalent of 100 percent of the packaging we sell—regardless of where it comes from.
The convenience of food and beverage packaging is an important part of modern life, and its proper handling throughout the value chain is of utmost importance. Because of this, since 2002, Coca-Cola FEMSA has collaborated with other food and beverage companies through ECOCE, a Mexican Civil Association that promotes the collection of waste, the creation of a national market for recycling, and the development of recycling programs. We are leaders in PET bottle-to-bottle recycling in Latin America. In 2005, we joined efforts in Mexico to operate the first Food Grade PET Recycling Plant in Latin America, called IMER (or the Mexican Recycling Industry in English). Through these ongoing efforts—together with our leadership in the use of recycled resin in our packages now of 21%, we are on track to achieving our goal of reaching 25% by 2020. We are pleased to join forces with The Coca-Cola Company through the “World Without Waste” initiative to multiply our impacts across the territories we enjoy the privilege to serve in Latin America for the benefit of our communities and to fulfill our 2030 vision of collecting and recycling the equivalent of 100 percent of the packaging we sell—regardless of where it comes from.
Transforming our Operating Model
Coca-Cola FEMSA’s present and future success depends
on continued operational excellence. In 2018, we further
strengthened our competitive advantage by developing and
deploying next-generation strategic business capabilities
including the KOFmmercial Digital Platform (KDP), which is
backed by analytics, and Digital Distribution.
In particular, KDP is adapting our business to technology-driven commerce. In 2018, we continued to roll out the operational tool, reaching 7,600 pre-sale routes in 8 countries by year’s end. We plan to expand its use into the newly acquired territories of Uruguay and Guatemala in 2019.
Improving Efficiency, Productivity and Safety
Our proprietary Manufacturing Management Model advances
efficiency, productivity and safety across our operations. During
2018, we continued to roll out the comprehensive program,
which covers plant operations, standardized maintenance
systems and production line execution.
KDP THREE PILLARS
Advanced analytics for revenue transformation
Dynamic initiative management
Shopper, consumer, and client engagement
By year’s end, we implemented the new Plant Operating Model in 69 bottling lines—increasing efficiency by 2 percent over 2017. In addition, we merged the Manufacturing Management Model’s core elements into our end-to-end Digital Manufacturing 2.0 platform in order to enhance production line execution.
A key objective of this new model is to embed a culture of safety across our workforce and improve our overall safety performance. We aim to achieve zero work-related injuries and illnesses among our employees, contractors and communities by ensuring the safety of our workplace.
As a result of our strategic initiatives, we reported a Lost Time Incident Rate (LTIR) of 1.07 in 2018, a 12% decrease compared with 2017 and a 69% reduction compared with 2014. They also contributed to a 16% reduction in our Lost Time Incident Severity Rate (LTISR), from 26.97 in 2017 to 22.68 in 2018. We further achieved a Total Incident Rate (TIR) of 1.81, a 22% decrease versus 2017.
Lost time incident rate
LTIR
2016
2017
2018
Total incident Rate
TIR
2016
2017
2018
Coca-Cola FEMSA’s operating model transformation extends to our supply chain. Through our KOF Logistics Services (KLS) tool, we standardize processes, enhance centralized organizational capabilities and invest in technology platforms across our supply chain. For example, we have introduced a digital distribution system in Mexico and Brazil which consists of digitizing our distribution by installing telemetry devices and a distribution platform. This initiative results in better route planning, increased safety and fuel and maintenance savings. Digital Distribution will be expanded across all markets in 2019. In addition, to contribute to our vendors’ economic, social and environmental development while improving our industry’s level of sustainability, we offer a comprehensive Sustainable Sourcing Program.
Cultural Evolution
Transforming our business and accelerating our cultural
evolution depends on the support of our people. We therefore
continue to build a strong foundation based on the cornerstones
of inspirational leadership, talent development and innovation.
Internally referred to as our “KOF DNA”, this model guides our
people with the tools and capabilities they need to succeed. For
example, recognizing that our people co-create our culture and
share responsibility for our company’s transformation, our KOF
DNA will enable us to achieve our strategic vision of being the
best total beverage bottler in our industry.
KOF DNA
Sustainability Progress
2018 Highlights
Sustainability is an integral part of our day-to-day business at Coca-Cola FEMSA, supporting our mission to simultaneously generate economic and social value for all stakeholders. Our commitment to reduce our use of natural resources, reduce waste and reduce the carbon footprint of our value chain by 20 percent by 2020 has received widespread recognition.
As sustainability is part of our day-today business, we continue producing our 100% recycled PET bottle for our Ciel water brand in Mexico.
We currently
give back
to the
environment 100%
of the water we use
in the production
of our beverages in
Brazil, Central America,
Colombia, and Mexico 
In addition to being the only Latin American beverage company included in the Dow Jones Sustainability Emerging Markets Index for the sixth consecutive year, in 2018 Coca-Cola FEMSA merited inclusion in:
In addition, 5 of Coca-Cola FEMSA’s bottling facilities received the ‘Environmental Excellence’ distinction from the Mexican Federal Attorney’s Office for Environmental Protection (PROFEPA), the highest recognition granted by the agency.
