just on Call - CAGNY 2012: Coca-Cola Enterprises not fazed by Eurozone crisis
Coca-Cola Enterprises is confident of its business model
Coca-Cola Enterprises (CCE) has said it is confident its business model can handle any shift in European consumption patterns that may occur as a result of the continent's slow economic recovery.
Speaking at the Consumer Analyst Group New York conference today (23 February), CCE's chairman and CEO, John Brock, told attendees that, while in 2008 there was a "meaningful shift" in European consumption, it had no effect on the company's profitability due to its business model.
"In terms of the economic environment, importantly, when the 2008 recession hit here in North America, it dramatically impacted our North American business," Brock said. "We had a profit situation in North America where we frankly didn't make a lot of money in grocery stores.
"Interestingly and importantly, in Europe that didn't happen because we have a business model in Europe which is very robust," he added. "We have not engaged in 'stack 'em high, sell and achieve' concepts, and so as a result, when consumers walk into Tesco, Sainsbury's or Carrefour and buy one of our products, the overall profitability to us is not dramatically different from a take home package."
Brock added that CCE's light presence in countries seriously affected by the Eurozone crisis has worked to its advantage.
"It's important to think about the countries we are in in Europe," he said. "We are in six countries ... we are not in Portugal, Italy, Ireland or Greece, so that puts us in a position where the Eurozone issues are real, but less significant."
Summing up, he said: "I think the economic recovery in Europe is a little behind North America, but in terms of consumer views and expectations, not dramatically different. If consumers engage in a consumption shift that they did four years ago, our business model is well equipped to deal with that."
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