Coca-Cola Consolidated, Inc. (COKE): Business Model Canvas [10-2024 Updated]

In the competitive landscape of the beverage industry, Coca-Cola Consolidated, Inc. (COKE) stands out with a robust business model that effectively combines key partnerships, diverse product offerings, and efficient distribution channels. This blog post explores the intricacies of COKE's Business Model Canvas, detailing how the company leverages its resources and relationships to deliver exceptional value to its customers while maintaining a strong market presence. Discover how COKE's strategic approach not only drives revenue but also fosters long-term success in a dynamic marketplace.

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Key Partnerships

Collaborates with The Coca-Cola Company for beverage supply

Coca-Cola Consolidated, Inc. relies heavily on its partnership with The Coca-Cola Company, which provides the concentrates, syrups, and other essential ingredients for its beverage products. In the first nine months of 2024, payments made by Coca-Cola Consolidated to The Coca-Cola Company totaled approximately $1.58 billion. This partnership is critical as over 80% of these payments are for key inputs that constitute the majority of the soft drink products manufactured and distributed by Coca-Cola Consolidated.

Partners with retail giants like Walmart and Kroger

Coca-Cola Consolidated has strategic relationships with major retailers, including Walmart and Kroger. In the first nine months of 2024, Walmart accounted for approximately 21% of the company's total bottle/can sales volume and 17% of total net sales. Kroger contributed approximately 15% of bottle/can sales volume and 12% of net sales during the same period. This partnership with retail giants enhances Coca-Cola Consolidated's distribution capabilities and market presence.

Engages with other beverage companies like Keurig Dr Pepper and Monster Energy

The company also collaborates with other beverage entities, including Keurig Dr Pepper and Monster Energy. These partnerships enable Coca-Cola Consolidated to diversify its product offerings beyond traditional soft drinks, enhancing its market competitiveness and reach in various beverage categories.

Utilizes third-party distributors for alternative delivery methods

Coca-Cola Consolidated has shifted to using third-party distributors to enhance delivery efficiency. In the third quarter of 2024, more than half of the post-mix gallons sold were delivered using alternative distribution methods, which provide flexibility and reduced operational costs. This approach is part of a broader strategy to optimize the supply chain and improve service delivery to customers.

Works with technology providers for digital platforms

The company invests in technology partnerships to improve operational efficiency and enhance the customer experience. This includes the development of digital platforms that facilitate better inventory management, sales tracking, and customer engagement strategies. These technological advancements are crucial for maintaining competitiveness in the rapidly evolving beverage market.

Partnership Type	Partner	Contribution to Sales Volume	Payments Made (First Nine Months 2024)
Supply Collaboration	The Coca-Cola Company	80% of inputs	$1.58 billion
Retail Partnership	Walmart	21% of bottle/can sales volume	N/A
Retail Partnership	Kroger	15% of bottle/can sales volume	N/A
Beverage Collaboration	Keurig Dr Pepper	Varies by product	N/A
Beverage Collaboration	Monster Energy	Varies by product	N/A
Distribution Method	Third-party distributors	50% of post-mix gallons	N/A
Technology Partnership	Various technology providers	Operational efficiency	N/A

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Key Activities

Manufacturing and bottling nonalcoholic beverages

Coca-Cola Consolidated, Inc. (COKE) manufactures and bottles a wide range of nonalcoholic beverages. In the first nine months of 2024, the company reported net sales from sparkling beverages at $3,025,902 thousand and from still beverages at $1,694,676 thousand, marking a total of $4,720,578 thousand in bottle/can sales, a 3.7% increase from the previous year.

Distribution through direct store delivery (DSD) and alternative routes

The company employs a Direct Store Delivery (DSD) method as its primary distribution strategy. As of the third quarter of 2024, less than 10% of its bottle/can volume was delivered through alternative routes, which include third-party distributors. This shift has been part of a broader strategy to enhance customer service and profitability.

Distribution Method	Percentage of Total Volume	Notes
Direct Store Delivery (DSD)	Over 90%	Primary method for delivering products to retail customers
Alternative Distribution	Less than 10%	Includes third-party distributors for certain products

Implementing supply chain optimization strategies

Coca-Cola Consolidated has invested significantly in supply chain optimization. In the first nine months of 2024, capital expenditures totaled $287.3 million, with expectations for the full year to reach approximately $350 million. This investment focuses on enhancing production capabilities, reducing costs, and increasing capacity.

Executing marketing and promotional campaigns

Marketing funding support from The Coca-Cola Company was reported at $48.5 million in the third quarter of 2024, up from $43.2 million in the prior year. This funding is critical for executing marketing strategies that promote product visibility and drive sales.

Managing relationships with retailers and customers

The company has established strong relationships with major retailers. For instance, Walmart and Kroger account for approximately 29% of total net sales. In the first nine months of 2024, Walmart represented 17% of total net sales, while Kroger accounted for 12%.

Retailer	Percentage of Total Net Sales (2024)
Walmart Inc.	17%
The Kroger Co.	12%

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Key Resources

Production facilities across 14 states and D.C.

Coca-Cola Consolidated, Inc. operates production facilities in 14 states and Washington, D.C. As of 2024, the company has invested approximately $287.3 million in capital expenditures to enhance its supply chain and production capabilities.

Strong brand portfolio, primarily Coca-Cola products

The company’s net sales for the third quarter of 2024 totaled $1.77 billion, marking a 3.1% increase from the previous year. Sales from sparkling beverages contributed significantly, with $1.03 billion from bottle/can sales of sparkling beverages, reflecting a 5.8% increase.

Skilled workforce and operational technology

The workforce is integral to Coca-Cola Consolidated's operations, with a focus on enhancing efficiency through technology. The company reported a labor cost increase, which represents approximately 60% of total selling, delivery, and administrative expenses. In addition, the company has adopted operational technology improvements to optimize supply chain processes.

Distribution network including owned and third-party vehicles

Coca-Cola Consolidated has a robust distribution network that includes both owned and third-party vehicles. In 2024, more than half of the post-mix gallons sold were delivered using alternative distribution methods, indicating a shift towards efficiency in logistics. This network supports sales channels including grocery stores and restaurants, contributing to the company’s comprehensive market reach.

Financial resources for capital investments

As of September 27, 2024, Coca-Cola Consolidated reported total assets of $5.27 billion, with cash and cash equivalents amounting to $1.24 billion. The company’s financial resources enable ongoing capital investments, with expectations for total capital expenditures to reach approximately $350 million for the full year of 2024.

Key Resource	Details	Financial Impact
Production Facilities	14 states and D.C.	$287.3 million in capital expenditures (2024)
Brand Portfolio	Primarily Coca-Cola products	$1.77 billion net sales (Q3 2024)
Workforce	Skilled workforce with technology enhancements	Labor costs approx. 60% of SD&A expenses
Distribution Network	Owned and third-party vehicles	More than 50% post-mix delivered via alternative methods
Financial Resources	Total assets of $5.27 billion	$1.24 billion in cash and cash equivalents (as of Sept 2024)

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Value Propositions

Diverse beverage offerings catering to consumer preferences

Coca-Cola Consolidated, Inc. (COKE) offers a wide range of beverages that cater to various consumer preferences. As of the third quarter of 2024, the company reported net sales of $1.77 billion, with sparkling beverages generating $1.03 billion and still beverages contributing approximately $585 million. The diverse product range includes popular brands such as Coca-Cola, Diet Coke, Sprite, and Dasani, ensuring that different customer segments are effectively targeted.

High-quality products from a well-recognized brand

The Coca-Cola brand is synonymous with quality and reliability, which significantly enhances its value proposition. The company's products are backed by extensive marketing efforts and a strong brand reputation. For instance, Coca-Cola Consolidated has maintained a gross profit of $698 million, reflecting a gross margin of 39.5% in the third quarter of 2024. This high-quality perception supports premium pricing strategies, allowing the company to maintain profitability even in competitive markets.

Efficient distribution ensuring product availability

Coca-Cola Consolidated has developed a robust distribution network that ensures product availability across various retail channels. The company reported a net sales increase attributed to higher average bottle/can sales prices, which rose by approximately $60 million. The shift to alternative distribution methods for certain products has also streamlined operations, demonstrating the company's commitment to efficiency in its supply chain management.

Commitment to sustainability and community service

The company is actively engaged in sustainability initiatives, which resonate with environmentally conscious consumers. These efforts include reducing plastic waste and improving water efficiency. In 2024, Coca-Cola Consolidated reported capital expenditures of approximately $350 million, part of which is directed towards sustainability projects. Such commitments enhance the brand's appeal and foster loyalty among consumers who prioritize corporate social responsibility.

Strong customer service through digital platforms

Coca-Cola Consolidated leverages digital platforms to enhance customer service and engagement. The company’s investment in technology has been pivotal in optimizing operations and improving customer interactions. In the first nine months of 2024, the company generated $707.9 million in cash flows from operations, allowing for further investments in digital initiatives. This focus on digital transformation helps maintain a competitive edge and improves customer satisfaction.

Value Proposition	Description	Financial Impact
Diverse Beverage Offerings	Wide range caters to different consumer preferences	Net sales: $1.77 billion (Q3 2024)
High-Quality Products	Strong brand reputation and quality assurance	Gross profit: $698 million; Gross margin: 39.5% (Q3 2024)
Efficient Distribution	Robust network ensuring product availability	Sales price increase: $60 million (Q3 2024)
Commitment to Sustainability	Focus on eco-friendly practices	Capital expenditures: $350 million (2024)
Strong Customer Service	Enhanced engagement through digital platforms	Cash flows from operations: $707.9 million (first nine months 2024)

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Customer Relationships

Focus on building long-term partnerships with retailers

Coca-Cola Consolidated, Inc. (COKE) emphasizes strong relationships with key retailers, which significantly contribute to its sales strategy. Approximately 36% of the Company's total bottle/can sales volume comes from its largest customers, including Walmart and Kroger.

Engages customers through promotional activities and sponsorships

The Company invests heavily in marketing and promotional activities, with total marketing funding support from The Coca-Cola Company and other beverage companies reaching $48.5 million in Q3 2024, up from $43.2 million in Q3 2023.

Utilizes a digitally enabled selling platform for seamless order processing

COKE has developed a digitally enabled selling platform that enhances order processing efficiency. This initiative is part of their broader strategy to optimize supply chain management and improve customer interactions.

Provides responsive customer support and product information

The Company has a robust customer support system that ensures timely responses to retailer inquiries and provides comprehensive product information. As of September 27, 2024, the allowance for doubtful accounts was $11.0 million, indicating a proactive approach to managing customer credit risks and ensuring satisfaction.

Develops loyalty programs for key accounts

COKE is committed to fostering loyalty among its key accounts by developing tailored loyalty programs. This includes providing incentives and promotional support that are designed to enhance long-term partnerships with retailers.

Aspect	Details
Largest Customers	Walmart: 21% of total bottle/can sales volume; Kroger: 15% of total bottle/can sales volume.
Marketing Funding Support (Q3 2024)	$48.5 million.
Allowance for Doubtful Accounts	$11.0 million.
Digital Selling Platform Launch Year	2024.
Sales Growth (Q3 2024)	Net sales increased to $1.77 billion, a 3.1% increase from the previous year.

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Channels

Direct sales to grocery stores, mass merchandise, and convenience stores

Coca-Cola Consolidated, Inc. generates a substantial portion of its revenue through direct sales to grocery stores, mass merchandise retailers, and convenience stores. In the first nine months of 2024, net sales from bottle/can sales reached approximately $4.72 billion, with a significant contribution from these retail channels. Specifically, sales of sparkling beverages amounted to $3.03 billion, reflecting a 4.6% increase from the previous year.

On-premise sales at restaurants and recreational facilities

On-premise sales, which include sales at restaurants, schools, and recreational facilities, are another critical channel for Coca-Cola Consolidated. These sales are characterized by immediate consumption of their products. In the first nine months of 2024, post-mix sales and other related sales totaled approximately $173 million, although this represented a decline of 14.7% compared to the same period in 2023. The decline is attributed to a strategic shift towards alternative distribution methods.

Vending machine outlets for easy access

Coca-Cola Consolidated operates vending machine outlets as a direct channel to provide easy access to its beverages. This channel complements the other distribution methods, especially in high-traffic areas such as shopping centers and schools. The company has seen fluctuations in sales volumes attributed to changes in consumer behavior and preferences. Specific sales figures from vending machines are not always disclosed, but they form a part of the overall retail strategy.

E-commerce platforms for online sales

The rise of e-commerce has prompted Coca-Cola Consolidated to enhance its online sales channels. In 2024, the company has been focusing on integrating its products into various online retail platforms to cater to the growing demand for home delivery and online shopping. This strategic shift aims to capture a larger share of the market as consumer preferences continue to evolve.

Alternative distribution channels for specific products

Coca-Cola Consolidated has increasingly utilized alternative distribution channels, especially for specific products like Dasani water. In 2024, the company shifted the distribution of certain products, such as casepack Dasani water sold in Walmart, to a non-direct store delivery method. This change has resulted in a reported decrease of 1.8% in sales volume during the third quarter of 2024. More than half of the post-mix gallons sold in their franchise territory were delivered using these alternative methods, indicating a significant strategic pivot in their distribution approach.

Channel	Sales Contribution (2024)	Change from Previous Year
Direct to Retail (Grocery, Mass Merchandise, Convenience)	$4.72 billion	+3.7%
On-Premise (Restaurants, Recreational Facilities)	$173 million	-14.7%
Vending Machine Outlets	Not Disclosed	N/A
E-commerce Platforms	Growing focus	N/A
Alternative Distribution Channels	Significant Shift	Impact of 1.8% decline in specific product sales

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Customer Segments

Retail customers including large chains and local stores

Coca-Cola Consolidated, Inc. (COKE) serves a broad range of retail customers, from large chains such as Walmart and Kroger to local grocery stores. In the first nine months of 2024, retail sales accounted for significant portions of COKE's revenue. For instance:

Customer Type	Approximate Percent of Total Bottle/Can Sales Volume	Approximate Percent of Total Net Sales
Walmart Inc.	21%	17%
The Kroger Co.	15%	12%
Total for Top Customers	36%	29%

On-premise locations such as restaurants and schools

COKE also targets on-premise locations where beverages are consumed immediately, including:

• Restaurants
• Schools
• Amusement parks
• Recreational facilities

In the third quarter of 2024, the net sales from on-premise channels were impacted by a shift in consumption patterns, but still represented a crucial segment of their customer base.

Health-conscious consumers seeking low-calorie options

The rising trend of health-conscious consumption has led COKE to expand its offerings to include low-calorie and no-calorie beverages. In the first nine months of 2024, the sales of still beverages, which include these health-focused options, amounted to:

Product Category	Net Sales (in thousands)	% Change Year-over-Year
Still Beverages	$1,694,676	2.1%

Beverage distributors and wholesalers

COKE also serves beverage distributors and wholesalers, which play a vital role in the distribution network. Sales to other Coca-Cola bottlers in the third quarter of 2024 were reported at:

Sales Channel	Net Sales (in thousands)	% Change Year-over-Year
Sales to Other Coca-Cola Bottlers	$88,363	0.7%

Diverse demographic groups across 14 states

COKE operates across 14 states, catering to diverse demographic groups. The company employs targeted marketing strategies to appeal to various consumer segments. The overall net sales for the first nine months of 2024 were:

Metric	Value (in thousands)
Total Net Sales	$5,153,221

This diverse customer base allows COKE to tailor its product offerings and marketing strategies effectively, ensuring broad market penetration and sustained growth.

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Cost Structure

Major costs include raw materials and production expenses

The cost of sales for Coca-Cola Consolidated, Inc. increased by $32.2 million, or 1.1%, reaching $3.10 billion in the first nine months of 2024, up from $3.07 billion in the same period in 2023. This increase was primarily driven by heightened input costs, particularly for concentrate and manufacturing, which contributed approximately $80 million to the total cost of sales.

Significant labor costs associated with manufacturing and distribution

Labor costs account for approximately 60% of total Selling, Delivery, and Administrative (SD&A) expenses. In the third quarter of 2024, SD&A expenses rose by $25.7 million, or 5.8%, totaling $471 million compared to $445 million in the third quarter of 2023. This increase was largely attributed to annual wage adjustments and increased incentive compensation due to strong operational performance.

Marketing and advertising expenditures to promote products

Total marketing funding support received from The Coca-Cola Company and other beverage companies was $143.1 million in the first nine months of 2024, compared to $126.3 million in the same period of 2023. In the third quarter of 2024 alone, marketing funding support was $48.5 million.

Transportation costs for product delivery

Shipping and handling costs included in SD&A expenses were approximately $599 million in the first nine months of 2024, compared to approximately $586 million in the same period of 2023. This reflects a strategic shift in distribution methods, with a portion of deliveries now managed through alternative distributors.

Administrative and operational overhead

Administrative expenses also reflect the overall operational overhead. The total SD&A expenses for the first nine months of 2024 amounted to $1.35 billion, an increase from $1.30 billion in the first nine months of 2023. The percentage of SD&A expenses relative to net sales rose to 26.3% in 2024 from 25.9% in 2023.

Cost Category	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (in millions)
Cost of Sales	$1,067.6	$1,050.9	$16.7
SD&A Expenses	$471.0	$445.3	$25.7
Shipping and Handling Costs	$206.0	$200.0	$6.0
Marketing Funding Support	$48.5	$43.2	$5.3
Total SD&A Expenses	$1,353.7	$1,301.2	$52.5

Coca-Cola Consolidated, Inc. (COKE) - Business Model: Revenue Streams

Sales from bottle/can products, primarily sparkling and still beverages

In the third quarter of 2024, Coca-Cola Consolidated reported net sales from bottle/can sales totaling $1.62 billion, an increase of 4.3% from the previous year. The breakdown is as follows:

Product Category	Q3 2024 Sales (in thousands)	Q3 2023 Sales (in thousands)	% Change
Sparkling Beverages	$1,034,690	$977,663	5.8%
Still Beverages	$585,527	$575,954	1.7%
Total Bottle/Can Sales	$1,620,217	$1,553,617	4.3%

Revenue from post-mix sales and service fees

Post-mix sales generated $57.072 million in revenue during the third quarter of 2024, reflecting a decrease of 19.7% compared to $71.101 million in Q3 2023. The decline is attributed to a shift towards alternative distribution methods for delivering post-mix products, resulting in a reduction of direct company sales.

Transportation revenue from logistics services

Transportation revenue from logistics services, which includes freight hauling and brokerage, is recognized as services are rendered. In the first nine months of 2024, total net sales from logistics services amounted to $432.643 million, down 8.0% from $470.327 million in the same period of 2023.

Equipment maintenance fees for cold drink equipment

Revenue from equipment maintenance fees is recognized over time as services are completed. This revenue is included in the overall logistics services figures and is part of the $432.643 million reported for the first nine months of 2024. Maintenance services typically complete within a short timeframe, contributing significantly to the overall service revenue.

Marketing funding support from Coca-Cola and other partners

Marketing funding support from The Coca-Cola Company and other partners totaled $143.1 million in the first nine months of 2024, compared to $126.3 million in the same period of 2023, reflecting a year-over-year increase that supports promotional efforts and market penetration strategies.

Article updated on 8 Nov 2024

Resources:

1. Coca-Cola Consolidated, Inc. (COKE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Coca-Cola Consolidated, Inc. (COKE)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Coca-Cola Consolidated, Inc. (COKE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.