2017 Annual Report CCBCC
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2017 ANNUAL REPORT ANNUAL 2017 COCA-COLA BOTTLING CO. CONSOLIDATED CO. BOTTLING COCA-COLA Coca-Cola Bottling Co. Consolidated STREET ADDRESS (704) 557-4400 4100 Coca-Cola Plaza, Charlotte, NC 28211 CokeConsolidated.com FACEBOOK /CocaColaConsolidated MAILING ADDRESS PO Box 31487, Charlotte, NC 28231 TWITTER @CokeCCBCC 2017 ANNUAL REPORT INSTAGRAM @CocaColaConsolidated 86063_Cover.indd 1-3 03/12/18 11:59 AM BOARD OF DIRECTORS J. Frank Harrison, III Jennifer K. Mann CHAIRMAN OF THE BOARD OF DIRECTORS SENIOR VICE PRESIDENT, AND CHIEF EXECUTIVE OFFICER, CHIEF PEOPLE OFFICER AND COCA-COLA BOTTLING CO. CONSOLIDATED CHIEF OF STAFF FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER, Sharon A. Decker THE COCA-COLA COMPANY CHIEF OPERATING OFFICER, TRYON EQUESTRIAN PARTNERS, James H. Morgan CAROLINA OPERATIONS CHAIRMAN, COVENANT CAPITAL, LLC Morgan H. Everett VICE PRESIDENT, John W. Murrey, III COCA-COLA BOTTLING CO. CONSOLIDATED ASSISTANT PROFESSOR (RETIRED), APPALACHIAN SCHOOL OF LAW Henry W. Flint PRESIDENT AND CHIEF OPERATING OFFICER, Dr. Sue Anne H. Wells COCA-COLA BOTTLING CO. CONSOLIDATED EDUCATOR AND FOUNDER, CHATTANOOGA GIRLS LEADERSHIP ACADEMY James R. Helvey, III MANAGING PARTNER, Dennis A. Wicker CASSIA CAPITAL PARTNERS, LLC PARTNER, NELSON, MULLINS, RILEY & SCARBOROUGH, LLP Dr. William H. Jones FORMER LIEUTENANT GOVERNOR, CHANCELLOR, STATE OF NORTH CAROLINA COLUMBIA INTERNATIONAL UNIVERSITY Richard T. Williams Umesh M. Kasbekar VICE PRESIDENT OF CORPORATE VICE CHAIRMAN COMMUNITY AFFAIRS, OF THE BOARD OF DIRECTORS, DUKE ENERGY CORPORATION COCA-COLA BOTTLING CO. CONSOLIDATED PRESIDENT, THE DUKE ENERGY FOUNDATION (RETIRED) EXECUTIVE OFFICERS J. Frank Harrison, III E. Beauregarde Fisher, III CHAIRMAN OF THE BOARD OF DIRECTORS EXECUTIVE VICE PRESIDENT, AND CHIEF EXECUTIVE OFFICER GENERAL COUNSEL AND SECRETARY Henry W. Flint James E. Harris PRESIDENT AND CHIEF OPERATING OFFICER EXECUTIVE VICE PRESIDENT, BUSINESS TRANSFORMATION Umesh M. Kasbekar AND BUSINESS SERVICES VICE CHAIRMAN OF THE BOARD OF DIRECTORS David M. Katz EXECUTIVE VICE PRESIDENT William J. Billiard AND CHIEF FINANCIAL OFFICER SENIOR VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER Kimberly A. Kuo SENIOR VICE PRESIDENT, Robert G. Chambless PUBLIC AFFAIRS, COMMUNICATIONS EXECUTIVE VICE PRESIDENT, AND COMMUNITIES FRANCHISE BEVERAGE OPERATIONS James L. Matte Morgan H. Everett SENIOR VICE PRESIDENT, VICE PRESIDENT HUMAN RESOURCES 86063_Cover.indd 4-6 03/12/18 12:03 PM 1 86063_Narrative_Rev1.indd 1 03/12/18 1:14 PM 86063_Narrative.indd 2 3/8/18 3:59 PM TO OUR SHAREHOLDERS OUR PURPOSE —to Honor God in All We Do, to Serve new people, new technology platforms, new facilities and new Others, to Pursue Excellence and to Grow Profitably— processes is a work in progress—but work we are committed is the fixed compass point guiding Coca-Cola Consolidated. to doing well. We are also focused on continuous improvement In April 2017, we were honored and humbled to celebrate across our business, and are investing strategically to ensure 115 years as a Company. And what a momentous year it was. that our infrastructure, processes and portfolio are as robust We completed the acquisition phase of a six-year System and efficient as possible. Our solid net sales growth of 37% on Transformation, which included some of our largest and an actual basis, and 3.1% on a comparable basis, are positive most complicated transactions. Through it all, our people results of our efforts. have collaborated with passion, purpose and persistence, as 2017 was again a year of portfolio diversification. While pro- One Team Coke Consolidated. ducing and distributing over 300 of the world’s best brands and When our Company first engaged in the System Transformation flavors, we added bold new and enhanced flavors like Sprite effort in 2013, we had approximately 6,500 teammates in 11 Cherry and Coke Zero Sugar. Our Monster distribution increased states, serving 21 million consumers. By the end of 2017, we had across our territory. We continue to innovate and expand our over 16,000 teammates in 14 states and the District of Columbia, still beverage portfolio, with Gold Peak tea and coffee, Fairlife serving over 65 million consumers. We have grown our net sales milk, Minute Maid Refreshment, Dunkin’ Donuts coffee and over the last few years from $1.5 billion to over $4.3 billion. It more. In the face of challenging headwinds in our industry, we has been a journey of hard work, commitment, and tremendous produced strong revenue and volume growth, including our teamwork – and there is much work still to be done. But, it is sparkling portfolio. We also expanded our adjacency businesses that teamwork and passion that will help us work through all and our services to fellow bottlers. the challenges of rapid growth, and ultimately strengthen our We thank our teammates for the hard work and servant lead- business over the long-term. ership they have exemplified throughout this ongoing season of As we embrace the many opportunities and challenges facing transition. We are grateful for the many opportunities we have our Company, we remain focused on pursuing excellence and driv- to serve our communities, and we do so with passion. We are ing operational improvements by making significant investments positioning our business for long-term growth, as we continue in our business—expanding and refining our commercial and what has been a rewarding journey. brand marketing opportunities across our territory, introducing As Coca-Cola Consolidated remains firmly dedicated to Our new sales and operating processes, and building and improving Purpose, we know that by doing things the right way, we can our facilities. We continued to implement a new IT platform continue to provide meaningful value to our shareholders, team- (CONA), which remains a significant undertaking. Integrating mates, customers, and communities. We appreciate your support. J. FRANK HARRISON, III HENRY W. FLINT CHAIRMAN OF THE BOARD AND PRESIDENT AND CHIEF EXECUTIVE OFFICER CHIEF OPERATING OFFICER 3 86063_Narrative_Rev1.indd 3 03/12/18 1:17 PM PEOPLE 86063_Narrative.indd 4 3/8/18 3:59 PM OUR PEOPLE POUR THEIR HEARTS INTO THEIR WORK BECAUSE WE BELIEVE IN WHAT WE DO AND THOSE WE SERVE. SOME SAY YOU CAN’T BOTTLE THIS KIND OF PASSION. BUT WE DO IT, EVERY DAY. FOR YOU. WE’RE TOGETHER, ON PURPOSE. HIGHLIGHTS WE ARE THANKFUL for the immense time, talent, and • This year, we welcomed treasure that our teammates have invested in becoming one more than 3,000 new Coke Consolidated, always striving to live out our Values, teammates across our to grow our core business, and to serve others. franchise territory. We’re honored to be a Company that produces and delivers • In 2017, we opened our new state-of-the-art locally. For more than 115 years, we have been deeply rooted Learning Center in in our communities, serving our customers, and providing Charlotte, NC. We plan to delicious choices to our consumers. open additional Learning With every dawn, our people are working hard to drive Centers to provide even innovation and operational efficiencies. Teamwork is at the more opportunities for our new teammates to heart of all we do. We are genuinely invested in each other, grow and develop in their passionate about our Company and our brands, and com- Purpose-driven careers. mitted to serving others. 5 86063_Narrative_Rev1.indd 5 03/12/18 1:18 PM PURPOSE Coca-Cola Consolidated partnered with Through our Message in a Bottle campaign, we Teammates served local families Charlotte Rescue Mission to provide delivered thousands of handwritten messages by providing school supplies and 500 Thanksgiving meals to local of support to our service members, veterans, backpacks to students. families in need. and their families. 86063_Narrative.indd 6 3/8/18 3:59 PM BEHIND EVERY BOTTLE, EVERY MINI CAN, EVERY NEW FLAVOR AND TIMELESS CLASSIC, IS SOMETHING MUCH GREATER. THERE’S A STRONG PURPOSE THAT JOINS US TOGETHER, STRENGTHENING OUR CONVICTION AND OUR COMMITMENT TO SERVE OUR CUSTOMERS, OUR CONSUMERS, AND OUR COMMUNITIES. WE’RE HERE, ON PURPOSE. HIGHLIGHTS EVERY DAY, more than 16,000 aspiring servant leaders •e Wnow have chaplaincy drive our business forward and impact communities across services available at our territory. every location. Our passion fuels us and Our Purpose connects us. We • Our teammates strive to Honor God in All We Do, in meaningful ways, every contributed over 10,000 volunteer hours to day. As we grow and welcome new teammates across new support veterans, develop states, we remain united as one team, working together to Our teammates partnered with youth, fight homelessness Appalachia Service Project to build inspire and serve others. and hunger, and provide several new homes for families in need. Through the expansion of our business, we’ve searched disaster relief. for ways to live Our Purpose every day, caring for people and supporting our teammates and our communities. Our chaplaincy program now serves teammates in all of our facilities. We have worked together to fight hunger and homelessness and to support families in need. And we’ve donated funds and delivered products and supplies to those affected by the year’s tragic natural disasters. The energy and expertise of new teammates has only strengthened our commitment to Serve Others, Pursue Excellence and Grow Profitably. We are inspired to see teammates of just a few months join others who have served the Company for decades. Our connection helps us con- tinually grow together. 7 86063_Narrative.indd 7 3/8/18 3:59 PM PORTFOLIO 86063_Narrative.indd 8 3/8/18 4:00 PM WE ARE HONORED TO PRODUCE Commemorative bottles celebrated AND DELIVER THE WORLD’S FAVORITE NCAA Champions in our communities. BRANDS—MORNING, NOON AND NIGHT. WE HAVE INVESTED IN OUR FACILITIES, PROCESSES, AND SYSTEMS TO SUPPORT THE DIVERSITY OF FLAVORS AND SIZES WE OFFER OUR MILLIONS OF CONSUMERS. WE INNOVATE, ON PURPOSE. 115 YEARS AGO we began producing and delivering Sprite Cherry and Sprite Cherry a single, iconic brand in Greensboro, NC.