We also reached a new, broad cooperation framework with our partner, The Coca-Cola Company, that aims to maintain a mutually beneficial business relationship over the long term and allows both companies to focus on driving business growth.
We generated nearly 20 billion transactions in 2016, and maintained or gained market share in both sparkling and still beverages in key territories. We are building a compelling product portfolio with a wider array of sparkling beverages, juices, isotonic sports and energy drinks, teas, waters, and dairy products, maximizing value in each segment through innovation and increased affordability.
Significantly enhanced our profile in one of the largest markets for Coke products
in the world.”
Expansion and consolidation
Among other competitive advantages, our geographic footprint across ten countries provides us with the benefits of diversification. In 2016, for example, solid performance in Mexico, our largest market, was sufficient to offset headwinds in much of South America. In addition, per capita consumption trends indicate attractive potential for growth in several of our operations; we see significant opportunities ahead, particularly in the Central American markets of Panama, Costa Rica, Nicaragua and Guatemala, as well as in the Philippines.
We continue to transform the company by complementing organic growth with strategic value-creating acquisitions. In 2016 we acquired Vonpar in Brazil, a strategically important franchise that borders our territories in the south, and significantly enhances our profile in one of the largest markets for Coke products in the world. Combined, we will serve approximately 88 million consumers, nearly half of the Coca-Cola system’s volume in the country. The integration of Vonpar will create opportunities to extend our portfolio to new customers, generate economies of scale, and capture approximately BRL 65 million of synergies at the EBITDA level in the next 18 to 24 months.
The profitable transformation of our operations in the Philippines continued in 2016, in advance of the financial consolidation of this operation’s results beginning in 2017. We further strengthened the supply chain, enhanced control of distribution and logistics, and installed the fastest bottling line in the world as part of the effort to modernize our production capacity and expand our package portfolio.
Transforming the operating model
Our Strategic Framework continues to guide our long-term business growth. As part of the multi-year process launched in 2014 to create a leaner, more agile and flexible organization, we continue to evolve our core capabilities and transform our operating models via Centers of Excellence (CoE).
This year, the Commercial CoE rolled out the KOFmmercial Digital Platform in Mexico, which provides advanced analytics for revenue transformation, next generation trade marketing, and sales force automation. Already deployed to over 600,000 clients in over 3,400 routes across the country, it has quickly generated incremental volume and sales growth and improved point of sale execution. Deployment to other markets will take place through 2017.
Our Distribution & Logistics CoE is working to transform the supply chain; we implemented Digital Distribution at four distribution centers in Mexico in 2016, with mobile applications, telematics and live web platform that aim to improve customer satisfaction, optimize route-to-market resources, and enhance driver safety. In the Manufacturing CoE, we continued the development and rollout of our Manufacturing Management Model to bolster efficiency and productivity; in 2016, we increased production lines under our Plant Operating Model, covering one-third of the company’s total volumes.
million consumers in 2016
Strengthening our culture
As a growing multicultural corporation, Coca-Cola FEMSA is continuously evolving and adapting to ensure a strong, unified corporate culture that embraces diversity. To support the priorities identified via feedback from employees, we developed and deployed a number of initiatives including:
600,000+ clients already on KOFmmercial Digital Platform.”