Coca-Cola HBC Boston Consulting Group Matrix

Coca-Cola Zero Sugar is a shining star for Coca-Cola HBC, demonstrating robust mid-single digit volume growth in 2024. This success is fueled by the powerful Coca-Cola brand equity, maintaining a high market share while capitalizing on the increasing consumer demand for low-sugar options in the sparkling beverage market.

The company's strategic emphasis on reduced-calorie and no-calorie products, with 59% of its stock keeping units (SKUs) fitting this profile in 2024, highlights Coke Zero Sugar's pivotal role as a key growth engine. This performance underscores effective marketing initiatives and successful consumer acquisition within a competitive yet evolving sparkling beverage sector.

Coca-Cola HBC's energy drink segment, led by Monster, is a standout star, achieving a remarkable 30.2% volume growth in 2024. This continues a nine-year trend of double-digit expansion, significantly boosting organic revenue. The strategic rollout of products like Monster Energy Green Zero Sugar into 16 new markets capitalizes on the increasing demand for functional beverages, solidifying Coca-Cola HBC's leading position.

Coca-Cola Zero Sugar also shines as a star, delivering robust mid-single digit volume growth in 2024. This success is driven by strong brand equity and the growing consumer preference for low-sugar options, with 59% of Coca-Cola HBC's SKUs being reduced or no-calorie in 2024. Effective marketing and consumer acquisition strategies are key to its dominance in the sparkling beverage sector.

Costa Coffee's ready-to-drink (RTD) offerings are another star performer, with volumes surging by 23.9% in 2024. This growth across all operating segments, particularly in the out-of-home sector, reflects the rising consumer demand for convenient and quality coffee beverages. The company's focus on premiumization and variety positions Costa Coffee RTD for continued success.

Sprite stands as a significant sparkling beverage within Coca-Cola HBC's extensive portfolio, bolstering the company's overall market presence in the carbonated soft drink sector.

Operating in a well-established market, Sprite benefits from high brand recognition and enduring consumer demand, translating into reliable cash flow generation for Coca-Cola HBC.

Despite some fluctuations in the broader sparkling beverage category, Sprite demonstrated resilience, maintaining growth in key periods. For instance, in the first half of 2024, Coca-Cola HBC reported that sparkling beverages, including Sprite, saw a volume increase of 4.3%, underscoring its robust performance.

Its deeply entrenched distribution network and loyal customer base solidify Sprite's position as a consistent and valuable cash provider for the company.

Schweppes, a prominent brand in Coca-Cola HBC's portfolio, operates as a significant Cash Cow. Its established presence in the mature mixer and adult beverage segment ensures consistent revenue generation with limited need for substantial investment. The brand benefits from strong brand equity and a loyal consumer base across its operating markets.

In 2024, the adult sparkling beverage category, where Schweppes is a key player, demonstrated steady performance. Coca-Cola HBC reported that its adult beverages segment contributed positively to overall growth, with brands like Schweppes showing resilience. This stability is driven by consistent demand for its core products, allowing it to be a reliable source of cash for the company.

Schweppes' ability to maintain its market position with moderate marketing expenditure highlights its Cash Cow status. Its consistent profitability and substantial cash flow generation are vital for funding other strategic initiatives within Coca-Cola HBC's broader business operations.

Within Coca-Cola HBC's extensive portfolio, certain niche regional carbonated soft drink brands may exhibit characteristics of Dogs. These are brands that, despite operating in markets where core sparkling offerings like Coca-Cola, Fanta, and Sprite remain dominant, struggle to gain significant traction. They might be legacy products that have seen declining consumer interest or face formidable competition from agile local beverage producers in specific, slower-growing territories.

The financial impact of these underperforming brands can be substantial if not managed. Their contribution to Coca-Cola HBC's overall volume and revenue is likely minimal, potentially even negative when factoring in the costs associated with their production, distribution, and marketing. For instance, if a brand's sales in a particular region barely cover its operational expenses, it becomes a drain on resources.

For example, if a small, regional cola brand in Eastern Europe only accounts for 0.1% of Coca-Cola HBC's total volume and has declining sales year-on-year, it fits the Dog profile. Such brands often represent a missed opportunity for investment in more promising segments of the business. They are prime candidates for a strategic review, which could lead to their discontinuation or a complete overhaul in their market approach to prevent them from becoming persistent cash drains.

Dogs within Coca-Cola HBC's portfolio represent brands or product lines with low market share in slow-growing or declining markets. These often require significant investment for minimal returns, acting as a drain on resources. For example, a niche regional carbonated soft drink with declining consumer interest in a specific territory would fit this category.

These underperformers contribute little to overall volume and revenue, and their continued existence may not align with strategic growth objectives. A prime example could be a legacy product facing strong competition from agile local players, resulting in a negative or negligible profit margin after accounting for operational costs.

The company's focus on sustainability, with a goal for 100% recyclable packaging by 2025, means older, less eco-friendly packaging formats also risk becoming Dogs. Products heavily reliant on these outdated formats, which do not meet evolving consumer demands for convenience and environmental responsibility, are likely to see reduced sales and become resource drains.

Furthermore, products distributed in remote or challenging emerging markets with high logistics costs and low sales volumes can also fall into the Dog category. Currency volatility, as experienced in markets like Nigeria in 2024, can further inflate costs and reduce profitability, making these products candidates for divestiture or a strategic overhaul.

Beyond the established Costa RTD range, Coca-Cola HBC is exploring innovative ready-to-drink coffee formats and unique flavor profiles. These emerging products are designed to tap into the dynamic and rapidly expanding RTD coffee market, which is showing significant growth potential. For instance, the global RTD coffee market was valued at approximately $36.7 billion in 2023 and is projected to reach $91.5 billion by 2032, exhibiting a CAGR of 10.7% during the forecast period.

These new offerings are currently in their nascent stages of market introduction, characterized by a low initial market share. Consequently, they necessitate substantial investment in marketing and consumer education to build awareness and drive adoption. The strategic objective is for these ventures to mature into Stars within the BCG matrix, mirroring Costa's success, though they carry the inherent risk of becoming Dogs if market acceptance falters.

Coca-Cola HBC's emerging plant-based beverages are positioned as question marks due to their entry into a high-growth, yet competitive, European market. While consumer demand for these products is robust, with the plant-based milk sector alone projected to exceed $15 billion in Europe by 2027, these new offerings likely have a modest market share. Consequently, they require significant investment in marketing and distribution to build brand recognition and capture market share.

These products represent a strategic bet on future market trends, demanding substantial capital expenditure for scaling production and developing innovative formulations. The success of these question marks hinges on effectively converting initial investments into market leadership, similar to how established brands have grown. Failure to gain traction could result in them becoming Dogs, but the potential upside in a rapidly expanding market makes the investment compelling.

The company's expansion into functional beverages and innovative RTD coffee formats also places these product lines in the question mark category. For instance, the global RTD coffee market was valued at approximately $36.7 billion in 2023 and is projected to reach $91.5 billion by 2032. While these areas offer significant growth potential, their market penetration is still developing, necessitating ongoing investment in R&D and marketing to establish a strong competitive presence and potentially evolve into Stars.

Similarly, new digital-exclusive product lines face the question mark classification. The e-commerce segment saw significant acceleration in 2024, with many beverage companies reporting double-digit growth. These ventures require substantial investment in platform development, specialized logistics, and digital marketing to build online presence and consumer trust. The imperative is to scale rapidly within the online ecosystem to ensure profitability.