We operate in the following emerging markets: Armenia, Belarus, Bosnia & Herzegovina, Bulgaria, Moldova, Montenegro, Nigeria, Northern Macedonia, Romania, Russia, Serbia and Ukraine.
These countries share relatively similar political and economic volatility, with lower per capita GDP than our developing or established segments. As a result, consumer demand is especially price sensitive, making the affordability of Coca‑Cola HBC’s products even more important.
We deliver our products with a strategy of specialised revenue growth management, packaging and promotional programmes – these are the considerations at the core of our response to the nuances of local economic conditions.
- 438m population in our emerging markets
- 12 countries
- 52% sales volume from emerging markets in 2018
These countries were the first to be affected by the global financial and credit crisis of 2008. There is no substantial evidence of recovery. Despite this, GDP appears relatively stable and, in some cases (eg in 2012 and 2013), there has been a noticeable degree of growth. Unemployment rates, however, remain high and currencies continue to show high degrees of volatility.
Emerging markets volume breakdown (2018)
- 30% - Russian Federation
- 22% - Nigeria
- 17% - Romania
- 9% - Serbia and Montenegro
- 9% - Ukraine
- 6% - Bulgaria
- 3% - Belarus
- 2% - Bosnia & Herzegovina
- 1% - Armenia
- 1% - Moldova
The majority of emerging countries exhibit lower net sales revenue per unit than our established and developing segments. In some emerging markets, consumers continue to prefer branded drinks, including water and juice, over tap water or homemade drinks as their principal drink.
Our approach in emerging markets
Macro-economic trends remain unsettled in several emerging markets, with severe impacts on consumer demand. In light of this, we have adapted our strategies to focus on consumer relevance, affordability and execution excellence, together with continuing developments in cost efficiency and cross-border synergies.
The emerging countries have a relatively undeveloped distribution infrastructure and a fragmented retail sector. In general, we tend to seek efficiencies through restructuring. To expand the availability of our products, we have prioritised establishing robust distribution networks, using our direct delivery system and independent distributors and wholesalers.
In addition, we strategically locate coolers and other cold drink equipment to improve the availability of our chilled products and reduce the burden on our customers.
We believe there are significant growth opportunities in our emerging countries segment, marked by relatively low consumption rates, population size (particularly in the Russian Federation, Nigeria and Ukraine) and attractive demographic features – not least, the growing proportion of younger consumers who enjoy sparkling drinks (for example, in Nigeria).
|Volume (million unit cases)||1,143.8||1,096.6||4.3|
|Net sales revenue (€ million)||2,880.1||2,912.3||-1.1|
|Operating profit (EBIT) (€ million)||276.7||259.9||6.5|
|Comparable EBIT (€ million)||303.0||278.3||8.9|
|Total taxes1 (€ million)||N/A||129||N/A|
|GDP per capita (US$)||5,822||5,501.6||5.8|
|Bottling plants (number)||31||34||-8.8|
|Water footprint (billion litres)||N/A||10.2||N/A|
|Carbon emissions (tonnes)||350,871||368,144||-4.7|
|Safety rate (lost time accidents>1 day per 100 employees)||N/A||0.26||N/A|
1 Total taxes include corporate income tax, withholding tax, deferred tax as well as social security costs and other taxes that are reflected as operating expenses; as per IFRS accounts.
Source: The World Economic Outlook Database, International Monetary Fund, October 2018.
Kosovo: World Bank – Data from database: World Development Indicators.
Percentage changes are calculated on precise numbers.