Before the onset of the COVID-19 pandemic, Coca-Cola (NYSE: KO) was fixated on supplementing revenue growth with the improvement of its business operations. As it responds to challenges during the coronavirus era, the company is embarking on what seems an acceleration of the previous strategy, and dividend investors should take notice.
Coca-Cola revealed on Aug. 28 that it's planning to scale down its 17 business units to nine; the company's Global Ventures and bottling investment operations will continue to operate outside this structure. The streamlined units will be assisted by an internal organization called Platform Services, which will provide operational support, including "data management, consumer analytics, digital commerce, and social/digital hubs."
This emphasis on data will be helpful in achieving the current goal of trimming down the company's mammoth brand portfolio. In its most recent quarter, Coca-Cola shared an illuminating statistic: Less than 50% of its 400 master brands, which primarily have a global, regional, or local focus, make up 98% of annual company revenue. Conversely, over half of master brands -- ones that are mostly country-specific -- contribute just 2% to the top line. In last week's announcement, the organization stated that it will now favor brands within the global/regional/local framework across the following five categories: Coca-Cola beverages, sparkling flavors; hydration, sports, coffee, and tea; nutrition, juice, milk, and plant; and "emerging categories."