Coke cuts up to 260 jobs, despite coloured can success

Pippa Chambers
By Pippa Chambers | 8 December 2014
Colour Your Summer

Despite Coke's #colouryoursummer campaign tracking above expectations, Coca-Cola Amatil (CCA) is axing 260 jobs.

The company, which is one of the world’s top five Coca-Cola bottlers, announced in August that more than $100 million in savings had to be made in Australia. While in October a strategic review was announced, it's only today, just over two weeks to Christmas, that the extent of the job cuts have been revealed.

CCA's group managing director Alison Watkins said the company had made solid progress in developing and implementing a range of initiatives to stabilise earnings and return to growth.

“In August we announced that we are targeting over $100 million in savings in Australia from procurement, reduced support costs and improved productivity from the significant investment made in the supply chain and in IT investment over the past five years,” Watkins said.

“Since then we have finalised plans to restructure our back office support costs with a range of process improvement and automation initiatives. The restructure will lead to the reduction of up to 260 non-frontline positions, with the majority taking effect in 2015. This latest restructure, together with cost initiatives already in train, gives us a high level of confidence we will achieve our savings targets.”

The group's strategic review focuses on the three priorities of strong category leadership, a step-change in productivity and in-market execution, and better alignment with The Coca-Cola Company (TCCC).

In October AdNews reported on Coca-Cola's bid to counter falling revenue and profit. This included launching a raft of new products beyond fizzy drinks such as Barista Bros iced coffee – which received mixed reviews.

Watkins said solid progress has been made in the development and implementation of a range of growth initiatives to strengthen the brand portfolio, including its recent Colour Your Summer campaign which launched at the start of November.

For this, Coca-Cola broke all its own brand guidelines in an effort to reconnect to teens and make the brand cool again. It launched six limited edition coloured cans and rolled out one of its biggest ever marketing pushes in Australia to back it up. Pink, purple, blue, green and orange cans flew into stores and Coke invested millions in social and content marketing, as well as partnering with YouTube influencers to drive engagement with teen audiences.

“The recent launch of the 250ml cans, supported by the #colouryoursummer campaign, is tracking above expectations in terms of ranging, transactions and most importantly, recruitment of the next generation of Coca-Cola consumers,” Watkins said.

“We have a great line up of new product launches and marketing initiatives including the launch of Coke Life in the first half of 2015.”

Watkins said trading conditions in Australia continue to be challenging and while it has not yet seen the anticipated improvements in the grocery channel and operational accounts, it expects second half group earnings before interest and tax to “exceed” first half earnings of $316.7 million – before significant items.

For more news:

Are Coca-Cola’s coloured cans the next Share a Coke?
Coke's pin-up ad milks social backlash
Coca-Cola Christmas with kindness campaign

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at pippachambers@yaffa.com.au

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