Welcome back, everyone. I'm Charlie Higgs, one of the consumer staples analysts here at Redburn, in charge of the soft drinks companies and the food companies. I'm delighted to welcome along today, James Quincey, Chairman and CEO of The Coca-Cola Company, for a discussion on how the transformation sets it up for faster, more resilient long-term growth. Behind us, we've got many of the company's brands, you know, some of, or if not the strongest brands in consumer staples. It needs no introduction. They sell in over 200 countries with 200 bottlers. It's been delivering 8% organic sales growth over the past five highly disruptive years, with 2% coming from volumes. Last year alone, they added over 3,200 customers a day, so it's a growing system. I'm delighted to welcome James today to talk about some of the transformations that have driven that, marketing, brand, et cetera. But maybe the one to start with is on the consumer side of things, and perhaps you could just give us your sense of the consumer today, the health of the consumer, but then also how your consumer segmentation tools have evolved over the last five years. We hear a lot more about, you know, weekly plus consumers, for example, to help you deliver resilient growth under all operating environments. Sure. There were sort of two questions sort of bundled up together, so I'm bound to forget one of them. Let me start with the state of the consumer, and then we'll come on to how segmentation and how capability is enabling segmentation. I mean, firstly, the state of the consumer, we talked about it on the first quarter earnings call. You know, it truly is a moment of the cup half full or the cup half empty, depending on what you wanna which bit of the world you wanna look at. In aggregate, there's still a very robust global economy out there and robust consumer spending in total. Certainly as you saw, we were continuing to deliver volume growth and a normalizing level of price mix. So there's some pretty strong consumer spend out there. Now, obviously, you know, some of that is under pressure in some pockets. So if you're in the lower end of the income spectrum in the U.S., you're under pressure from inflation. You know, you can take one of those inflation baskets, which looks at the inflation by the basket you buy, depending on which income decile you're in, and it's pretty high if you're at the bottom end in the U.S., and you can see that pressure coming through. Saw that pressure coming through in QSR Restaurants, in a number of areas where footfall or basket size was under pressure, and of course, consequent behaviors like looking for affordability. So that, I think that's very... We talked about it in the first quarter on the U.S., and I think a lot of people have come out and kind of highlighted that as one area. To some extent, that is also true in Europe. There's not as much dispersion of the income spectrum in Europe, but I think there's some of that in Europe, and there are variants across the different countries. But Europe is pretty good with again people under pressure in that bit. But then, if you want to see the glass half full around the world, you know, you've got places like Latin America, where the consumer's in great shape, very strong growth, India, the same, parts of Southeast Asia. So, for every, you know, kind of slightly off the mean, the median story you want to look at, there's one on the other side as well. So, and I think the reality is, it's likely to always be that way. If everyone was doing well everywhere, the only thing that could happen is it could go down. So I think we're in a pretty, pretty good place in terms of the overall consumer. I'm sure that will continue to change and evolve over the coming quarters and years, but robust consumer globally. And I think the segmentation journey, you know, there's always been the kind of the holy grail thought of the marketing to one, you know, being able to market and talk to each person individually. And if you went back 20 years or so, or maybe even only 10, there just wasn't the information and the mechanisms to do that, and so you could fantasize about ever-increasing degrees of segmentation, and perhaps even sometimes generate the analysis to do it. But the ability to actually market and execute against it was much more limited. But I think what we've seen over the last 10 years or so is really the coming into being of not just the ability to analyze and identify consumer segments, but to actually be able to act on that information and insight, whether it be in the marketing, the product design, and reaching them where they wanted to be reached. So I think it's really the realization of a much more tangibly segmented opportunity to market and sell to people that wasn't physically possible, perhaps, in the past, and now it's much more so. And there are lots of examples across each bit of the spectrum as to how that actually happens. Perfect. And earlier this year at CAGNY, you also introduced this concept, I think, of the consumer need states, things like refresh, enhance, delight, connect, et cetera. And you've long spoken about having a consumer-centric portfolio and wanting to take bigger bets around that. Can you maybe just flesh out this consumer need state? You know, are there some that offer faster long-term growth than others, and do you have any gaps, do you think? Do we have any gaps? I mean, of course, we have gaps 'cause we're not number one in every category in every country, and not every category exists in every country. So there is ultimately, if you want to be total beverage, a journey to go on in establishing those positions. But the segmentation in that sense is really looking at the big need states. 'Cause notwithstanding the comments about being able to segment consumers, you still, when you're The Coca-Cola Company, need to look for scale. And whilst you might be able to identify lots of segments, it needs to ladder up to something big in terms of delivering against a brand or a category. So it's not that those need states, refuel, et cetera, et cetera, are-- we're absent in one, and we're all concentrated in the other. Like, we're distributed across them. We're very focusing on understanding them, and then breaking them down into how different consumers are acting and responding within the segments. Ultimately, though, to drive scale brands. We're not gonna be in the business of zillions of small things. We're gonna be in the business of pulling together consumer segments that add up to something big under a brand heading. Great. And then, obviously, it's been a very turbulent five years, a lot's happened. I wondered if you had any changes in thought in any of your categories on the long-term growth prospects. For example, coffee, I think, is now a bit more around selective prioritization, whereas in sparkling, it's been under just a renaissance in, in arguably mature markets like the U.S. and, and Mexico. Yeah, there I would distinguish, in the way you put the question between what's the category attractiveness and what do we need to do next? I think the long-term category attractiveness, actually, the beverage industry in total, and each of the main categories or each of the need main consumer segment, is there. And actually one of the things I always... I'm sure it was in the CAGNY that we always put out there, is actually the beverage industry has a vast runway of growth ahead of it. If you look at... And you can go and look at the slide in the CAGNY day. You know, the developed world and the developing world, 20% of the people live in the developed world. Roughly speaking, they pay money for 7 or 8 out of 10 drinks they buy, and we have a relatively small share of that. But in the developing world, they only spend, you know, 2 out of every 10 drinks that they actually spend money on, and we have a single-digit share of that in commercial beverages. And so what that tells you is actually the predominant feature of the beverage industry is it's yet to be created. The beverage industry is yet to be created, and it will be created largely in the developing economies. And so there's actually a huge runway ahead. And so I see the industry itself as profoundly attractive going forward, and actually, the categories within it all having robust growth potential, some slightly more than other. I know that we've changed the numbers a little bit, you know, in the last seven years, but it's fractions of the margin, like +1% here, six instead of five or four instead of five. The categories all have their attractiveness. And then within that, the things like saying, "Okay, coffee, selective place," like. I mean, really, this is a new category from our point of view. The industry is huge, it's been growing rapidly, and is profitable, even though it's relatively fragmented. We have to learn to walk before we can run. And so by the selective process, like, we're not gonna suddenly run round and try and do coffee everywhere without knowing what we're doing. Similarly, with things like fairlife, you know what? We need to get it right in certain places before we start trying to expand into lots of other places, and that's really what the selective prioritization in that case is about. It's not a comment on the industry attractiveness, it's a comment on what we need to do next so that we can think about where we are going. It's a good segue 'cause I love fairlife, and, and I'd obviously love you to send Damian some Chicagoan cows. But how do you think about scaling brands across this incredibly powerful Coke bottling network you have to drive faster long-term growth, while also being mindful of not perhaps destabilizing it or reducing the resiliency of their supply chain? Yeah. I mean, scaling brands is... The first starting point is just 'cause it works in country A, is not a reason that it will work in country B. There may be many of the same consumer needs, retail needs, et cetera, et cetera, but you have to say: Why is it gonna work in this country? So, yes, we wanna scale brands. We would rather have more global brands than it be a stable of lots of, you know, 200 countries worth of local brands. That's just the business we're in. And so we do look to expand. Clearly, step one is working out whether the brand actually has a unique reason to exist in the next country, and a reason to win. And it's not just 'cause it's from The Coca-Cola Company, that's not gonna, that's not gonna cut it. As it relates to categories like fairlife, there, the supply chain is a factor. There are a number of categories where supply chain is important, and perhaps most locally, the fairlife. And so what exists in the US as features of the dairy market there, is not the same in, not the same in Europe. US farms tend to be much larger. The ability to process milk is I mean, the scale of some of these factories is they're huge. I mean, we're building one in New York State at the moment. I think it's $650 million, one factory. I think it's number four or number five? I can't remember. But these are, these are mega facilities, and so they're not, they're not gonna just plonk down anywhere in the world. And so there is a question of whether the supply chain is there, to bring some of these products at, at the scale they need to be, in order to make the economics, make the economics work. ... Interesting. And then moving on to investing in the business, you've long said investing behind the top line is a key priority. How do you think about investing kind of that core, very strong brand portfolio, while also taking strategic bets in kind of up-and-coming categories, a bit like the alcoholic ready-to-drink? And then on the flip side, kind of what is the decision-making that you and the board make when you say, "Now is the time to stop investment," a bit like, you know, bulk water in China late last year? The stopping doing things tends to be the easier one to identify, 'cause it's largely going badly. That's kind of easier to spot, and like, "Okay, well, no, we're not growing, and we're losing money, and we have no share. Like, why are we doing this?" And so in the middle of COVID, we actually reduced the number of brands by half. And that, even that was quite painful. But in the end, it's like, if it's small, it's not growing, it's got no share, and it's irrelevant in the category, and doesn't make any money, let's get rid of it. And so those, as I said, are, in a way, the easier decisions, if you can't find a path to growth and profitability. Deciding where to invest next, the system, the beverage industry, and the nature of it, it's kind of an optimistic industry. Like, we're in the business of selling some optimism, some joy, some happiness. It's a positively orientated industry in the set of categories, and one of the features of that is people see lots of opportunities. So generally speaking, we see more opportunities than we have, you know... It's like going to the buffet. It's like the buffet's big... like, how do I not pile it all on the plate? Well, it doesn't all fit on the plate. And so, of course, there has to be some degree of process of saying: "Okay, where are we gonna prioritize? Like, what do we need to do to fix the basics on category X in country Y? So we actually have a relatively robust process of looking across all the countries and all the categories and saying: "Okay, where does the money need to go? What are the priorities for the next step of the journey in terms of building out the portfolio around the world?" And that's the harder part because people can see more opportunities than the money or time or human capability to actually execute on. Fascinating. You mentioned the brand trim back in 2020, where you cut down in half a few hundred. I wanted to move on to innovation, and again, around this slimmer portfolio, how do you maintain that experimental mindset while also being mindful of, you know, not leading up to a long tail that you used to have? Yeah, I mean, our biggest, maybe not our biggest problem, but certainly one of the problems we had is we were not sufficiently disciplined in terms of curating the things that weren't working, the long tail. So not only was the comment about getting rid of half the brands, but we have a lot of SKUs, 'cause each brand can have multiple SKUs or variants, flavor or package. And so being ruthless about curating the portfolio is one of the hardest parts of innovation. Actually, in a way, it's easier to come up with an idea. You come up with an idea on a way to market, a product in terms of its ingredients, its flavors, the brand idea or packaging. Whatever it is, you can come up with ideas, and there are a lot of ideas out there. Clearly, the more powerful ones tend to put together multiple elements of innovation at the same time, but the chances of it working perfectly the first time are low. Very few product innovations or even new companies got it right with the first idea they had. They tend to have evolved in some way, shape, or form and honed in on the best, rounded out solution. And so the challenge becomes in curation, distinguishing between those that are not doing well, but have the seeds of future growth and success, and those that are just not doing well. Clearly, you have the ones that are failing, and that therein is the hard assessment because if you look at studies of the beverage industry, and you go back, and there was one done on the US, which had looked at all launches over some long period of time, there were, like, 10,000 of them. And you could cluster them into the, you know, the best 10% all the way down to the worst 10%, and show what their sales performance was over 10 years. And of course, by 10 years, you know, the best were, like, in the billion-dollar brands, and the worst were out of the market. What's interesting about that analysis is the difference in the sales line between the top 10% and the bottom 10% was almost nothing in the first three years. It was still pretty small in the 4-5. So this need for patience and really trying to distinguish between which ones are gaining loyal and evangelical consumer base, you know, bases of consumers, and which ones are just, you know, struggling along is actually one of the hardest parts of the innovation in the beverage or managing innovation in the beverage industry. Fascinating. And, as a system, you sell a pretty staggering 2.2 billion servings a day. On my math, it's about 800 billion a year, so 800 billion data points going on around the system. A few years ago, you also moved it to a more networked organization with platform services. So I'd just be interested on your perspectives on just the sharing of data in the system to try and enhance your revenue growth management tools, and how that's benefiting the resiliency of your top-line growth. ... Yeah, yes. Yes, we sell a lot of product. I mean, 2.2 billion 8-ounce servings every day. It's, it's a lot of physical product. Just as a matter of reference, that comes out of about 1,000 factories for the Coke system globally. So there's, it's a huge physical system. It's... We're serving, I don't know what the number is, like 30 million retailers every week. There's a huge amount of data points. And of course, as everyone's into data these days, there's an opportunity to drown in it. What we have to focus on is not just getting the data and linking it together, but doing, doing something with it. And so as it relates to RGM, so the idea of, you know, really having the best strategy on what's the price per brand, per pack, by channel for the occasion that's being marketed to, clearly, having that data, we've got vast amounts of internal data. But the optimization of that revenue growth management strategy in the channel is not just about our own internal data. It's also about linking it to external data about what's happening. And that then can be brought together effectively with AI, which is a wildly overused term, which I was trying to avoid saying, but let's just say, put the AI word out there. Bring it all together and do something that is actually very powerful. If you went back 10 years, and you were in an emerging market, and you were a mom-and-pop retailer, of which we serve tens of millions each week, in order to order your beverages, you had to wait for the Coke salesperson to turn up, and then you would have a chat with them, and they would enter it, you know, in the old days, onto paper, and then onto a handheld device of some type. What you can do when you bring together your data, the external data, particularly the forward-looking stuff, and AI, is you can do two things. You can both give the retailer a predictive order for... You can do all sorts of sections. You can come in and use a camera to scan the store and tell the owner what they need to order. But essentially, it's all variants on the same idea, which is you can provide them with a predictive order on what they should get, which firstly, is more right than human, like, intuition, and secondly, allows the salesperson when they're in store to do account development activities. So it's a win-win. And it doesn't replace the salesperson. That's not the strategy we're pursuing. We're pursuing the two together strategy, and where we've implemented that, we've demonstrated we get a sales uplift. And the second benefit is the retailer can now just connect to the Coke bottling platform, and if they forget to order something or whatever, so and so from down the street says, "I'm having a birthday party, can you order extra whatevers?" They can just go onto the platform and add to the next delivery. So the data linked with the platforms on IT have vastly increased the potential to interact with the retailers in RGM, and also to optimize what they're buying and the inventory they hold, not just for us, but for them. Mm-hmm. Yeah, I think from memory, the bottlers' B2B platforms grew 20x from 2019- 2022. It's just phenomenal. But maybe moving to the topic of the bottling system, it does feel as an outsider that everyone now is much more aligned behind the idea of growth and top-line growth. It feels very aligned. You've obviously been in the system a lot longer, I think 1996 or so. Yeah. Could you perhaps maybe just characterize how the relationship with the bottlers has evolved and what your assessment is of it today? Yeah. Yeah, I joined a long time ago, '96. Look, the relationship with the bottlers is, you know, intimate, and then you can ask Damian, 'cause he's on next, from CCEP. He wanted, he wanted to make sure you save some questions for him. Look, the relationship with the bottlers is, in the end, we both have the same objective. We wanna have a growing, profitable, successful business centered on the brands of the Coca-Cola Company, not like... It's the Coca-Cola bottling system. So when it has gone off track, in the end, it was largely, in my mind, a lack of the company doing its job. Because it's it exists to help create the framework, and the strategy that then makes it attractive for the bottling partners to invest capital to pursue growth and profitability. And I was lucky to join the Coke system in a part of the world which was actually very effective at the time, which was the Latin American part of the operation. And so in a way, what you have seen over the last 20-30 years is each part of the world getting more and more centered on, we're both in it for growth and moving out all the things that get in the way of us succeeding together. I think that's what we've been able to do. You know, it's... I hope we don't reach the day when we have nothing left to argue about, because actually, the power of the franchise system is being able to leverage the different points of view and create something, and create something better. Mm-hmm. And then within the company specifically, there's been a big marketing transformation led by Manolo over the past few years. You've shifted to this new Studio X and network system, and I think about two-thirds of your spend now is on digital. Can you maybe just outline what have been some of the key benefits of moving to this new Studio X system? And then just in the one-third that is still traditional advertising, your view there on how you improved the return on spend? ... Well, let's start at the back end. Return on spend is a function of two things. One, what are the consumers paying attention to? So you—there's no point advertising on digital if they don't have the phones or vice versa. And so one is what are people actually consuming? And two, what is the price we're being offered by the media owner or the vehicle of the thing relative to how much airtime we get? And so there is an interplay between... It's not spend on digital because it's more effective at any price. No, it—there, there's a price at which you know, there's a market clearing price between the different media platforms in the end. Some are much more effective for certain things, but the price is also there. So we're very focused on what do we want our marketing programs to achieve, and diligently making sure we get the right return on investment for whichever platform it goes. And so it's about the effectiveness of the platform, but also, what are they charging us? And working all those things through as well. I mean, the marketing transformation, in a sense, you know, we... The social media and the digital consumption by everyone with their phones, was a transformation we were late to. And we were late for some, in a way, logical reasons, but we were late. And really, Studio X has been about catching up and getting back on the forefront. 'Cause if you think of it in the long trajectory of history, you know, this is just the latest transformation in what people consume. I mean, if you look at when we started doing marketing, we were one of the first companies to do coupons in newspapers. You know, take this to the soda fountain store and get one free. Then there were outdoor advertising, then it was radio, then it was TV. Each of these waves, we were right at the front of. If you look at the emergence of the internet and social media, and digital advertising, up until about 2015, maybe a couple of years later, but in those 15, 20 years up to 2015, the 100% mix of media, television and radio, and outdoor did not change. There was as much television, radio, and outdoor in 2015 as there was in 2000, say. What had changed was it went from whatever it was, 20% newspapers to 0, more or less, and you had 20% in search. Because, you know, the specificity of, "I've got a car to sell in Minnesota, and I'm advertising in the local paper, and then I can put it on a platform like Google and sell it through Google," it was a very specific need. But when the TV was still effective, it was not a world we had participated in a lot because we didn't need to sell cars in Minnesota. We were selling Cokes, 2.2 billion a day. Like, I don't need to go one by one to go... And that made us late to the social media revolution. And so the transformation has been about catching up and getting onto the front foot, which we've done with some of the open... The whole transformation has got us there. And it was a painful journey, in part because we were optimized for the strategy we were pursuing. You know, we were gonna buy media, so we had, you know, thousands of agency. We had. There's a marketing process which looks like this, and so they, you know, someone in procurement broke it down into all the pieces, and they bid out each piece, which made it, yeah, it made it cost-effective, but fiendishly complicated and very hard to change. So that had to be broken down and taken away, and a completely new process put in, which has now been much more effective. Yeah, I think proof in the pudding for me was Sprite in the U.S., number one brand with Gen Z millennials. I mean- Yeah, ahead of all competitive brands. Yeah. I wanted to talk about refranchising, and you've stated publicly your ambition to be the world's smallest bottler. I think after selling the Philippines to CCEP, the bottling asset's about 12% of your sales. So can you maybe just talk us through what are the characteristics you look for in a partner when deciding whether or not to refranchise in a bottling territory? Yeah. Bottling partner, we're after people who want to be long-term investors in the Coca-Cola business. We want people who have... And generally, we're talking about, I mean, I'm talking ownership now, because then you get into the management category. Long-term investors in the Coca-Cola system, they understand the nature of a franchise system and all the pros and cons and the way it works differently to a vertically integrated company. That they bring something to the table in terms of the locality that they're gonna be over. You know, the one of the great strengths of the Coke system is, yes, we're global with all these great global brands, but we're also profoundly local, and in many parts of the world, that's still very important. And so really having a connectivity to the local environment, the consumer, the retailers, the stakeholders, is very important for us. And then that they bring the capabilities and the willingness to invest in the right talent for management. And once you get those things, you can put together a great bottling system. And so, yes, we've been focused on becoming the world's smallest bottler. We're getting close, even though it's 12% of our revenue. Really, at the end of the day, if you look at the global bottling system in terms of volume, we still own about 3% of it, which, given that we were at almost 40%, is a substantial shift. Yeah. I wanted to talk about the talent in the business, where you've obviously got a very strong bench, and I think one of the great hallmarks has just been how willing you are to show your leadership team around the world. How do you and the board of directors think about developing kind of the next level of leadership that are gonna propel the company forwards for the next 138 years? Yeah, absolutely. I mean, whether it's the board or me or the executive leadership team, I mean, the focus on talent, the one thing we spend most time on at the executive leadership team is on what we call the PDF, or the People Development Forum. And also with the board, we have a tremendous focus on the talent pipeline in its aggregate, the talent pipeline by individual, when you're looking at the top 50 or 100 people, and who can ultimately make it to the top table. And the board has always been very focused on this question. It hasn't always gone smoothly for us, and so I think they're very clear on what they need to do to make sure we continue to focus on driving talent development, driving the culture of the enterprise, and stewarding that from the board level. And then the executive leadership team has to make it happen. And I think, you know, partly as you said, we give more people the opportunity, for example, to meet with investors and analysts, but that's all part of developing the next cadre of leaders. So we're very intentional, we're very focused. Obviously, we're a very global company, so we look to move people around. But it's absolutely top of mind. Perhaps just as an addendum to that, I mean, what kind of culture do you think you've been driving specifically within the company that's perhaps different to your competitors? I don't... I mean, I don't wanna—I can't really go and say, "Well, the competitor's done this or that," but look, the one thing I've been very focused on is when we started this transformation, said we needed to get back to growth, 'cause we had spent, you know, a decade at 3% revenue growth and $2 EPS. And now we've more than doubled the revenue growth rate, and, you know, we're almost on our way to $3 EPS. When you have a large... The more successful you are, and we've been around for 138 years, the more successful you are, and the longer you've been around, the larger you get, and therefore, you know, gravity takes hold. What appears in the center of the organization is a black hole, and it sort of sucks everyone in. So the bigger and the more successful you are, the more the culture turns internally, because it just becomes very big, and it takes a huge effort to actually coordinate internally. And that's true of, in my mind, it's true of companies, governments, institutions, all sorts of things. Which is why a lot of people try and, you know, have the idea of the portfolio of smaller companies. So that is something that's gonna happen by its nature. But it's not that we wanted to get rid of all that culture. We need to recognize that effect, recognize the deep pride that people have in working for the Coke Company. So we're not-- we don't need to change co... and constantly try and push to correct everything. We need to focus on supporting one aspect, which is, which has been used by a number of companies, to say, the growth mindset. And to really say, like, you know, talking to ourselves is not gonna be success. We need to focus on a growth mindset, and it's very simple. We need to be curious. Like, if... There's a famous speech written by Robert Woodruff, who's kind of the eponymous, not quite the inventor, but the creator of The Coca-Cola Company, and it's, as we understand it today, who wrote a speech on the fiftieth anniversary of Coke in 1936. And the headline of the speech was: "The World Belongs to the Discontented." Which is so profoundly true at Coke. It's like, if you win and everything's great, you've then got to be discontented and look for the opportunities going ahead. But that's all driven by a degree of curiosity. Curiosity about the consumer outside, or curiosity about the retailer, or just curiosity about whether all the reports you're producing internally, anyone's reading or not. What are you curious about? The second one is to have some degree of empowerment or proactivity. Curiosity is great. Okay, now I see this thing, but if I do nothing with it and tell no one about it, you know, who cares? It's, it's kind of intellectually interesting. So there has to be some degree of proactivity to go and do something with it. The third one was, don't automatically assume that you're the first person who's ever had this idea in the history of the world. The chances are someone has thought of it before and done something like it. At least try and find out what they did and what mistakes they made before you make all the same ones. At least make some new mistakes. So try and have a degree of inclusivity, of like, looking around the enterprise to see what's happening. And the last one is, which is very much about the transition from a TV ad-centric world to a social media-centric world, is don't wait to perfect it. If you make five TV ads a year, if you take an extra week making it better, just like when you make a movie, nothing really goes wrong. You can make it perfect. But in social media, the train's already left. I mean, it's like, everything has moved on. You need to be able to iterate much faster. So we just said, growth mindset, those four characteristics, just push on those. And if we can keep pushing on those, then we will avoid the kind of... We can just stay slightly ahead of the gravitational effect of the black hole. ... Excellent. And then the last one from me is, just looking back on your, your time as CEO since 2017, what have been some of your proudest achievements throughout the organization? And then going forwards, what are some of the, the biggest opportunities that investors should take away from for the Coca-Cola Company? Well, I think that the accomplishment I think is simply put that we've got back on a growth track. As I commented, we went from, you know, growing at 3 to growing more than double that, and the profit. But it's the revitalization of the Coke system. It's not just about the company, it's about the bottlers. You look at the performance of the bottlers over the last 7, 8 years, it's all there to see that we have put ourselves back on a growth trajectory as a company, collectively as the Coke system. But I go back to the speech from Robert Woodruff of 1936. The biggest danger in being successful is you get comfortable. And so the most important thing is to start thinking, what are the opportunities there? To be discontented, not in a miserable and kind of annoying way, but in an optimistic way about what's ahead of us. I made the comment earlier about the beverage industry is actually yet to be created. If you think about all the consumption, you know, whatever it is, 8 drinks a day from the 9 billion people, the vast majority of those are not commercial beverages yet. Mm. The opportunity is huge ahead, huge ahead of us, and we need to be discontented with today enough so that we create an even better tomorrow. So that's what I think it's all about, is getting us in that mindset, to keep driving, keep driving it forward. Perfect. James, thank you very much for that. Thank you. Yeah. Thank you. Now, I'm delighted to welcome... Thanks, Charlie. Delighted to welcome Damian Gammell, the CEO of Coca-Cola Europacific Partners, the world's largest Coca-Cola bottler, hot on the heels. Thanks, Charlie, for putting me on after James. I don't know what I did to upset you, but, yeah. How do I follow that? So anyway, I'll do my best. I'll do my best. Well, we've got a nice slide here that very nicely encapsulates just the enormous transformation that's, again, happened at CCEP, where over the last five highly disruptive years, not only have you averaged 5% organic sales growth with 1% volume, but you also found the time to pull off the Amatil transaction and then the Philippines. So I think at this, as this slide shows, it's now a very different diversified business, both geographically, channel pack, which offers faster long-term growth. But does it also come with more volatility, or is it more resilient, do you think, than the past? Probably a combination of both. I think we're definitely more resilient because we're more diverse. We've grown into a business that was predominantly Western European, which is a fantastic place to be in the beverage industry, and expanded into markets that have a different growth profile. So from that perspective, we've opened CCEP up to a higher top-line growth. Obviously, when you get growth in some markets, you do have to live with a degree of volatility. But I think when you look at the shape of the business now, whether it's by brand, by geography, by pack, by country, by channel, it's so diverse that we get resilience. You know, so we can have an up and down summer or period in one location, but consistently achieve that top-line growth, which we've, you know, guided to 4%, and so far beating it, so that's good. Yeah. I don't know if it says it on the slide, but you're now an organization of 42,000 people, up from 24,000 a few years ago, with some just incredible talent added. For example, New Zealand won the Candler Cup, the world's best bottler in 2020. How do you think about sharing this great knowledge across CCEP to maximize the benefits from a top and bottom line perspective? Yeah, obviously, being part of the system. I mean, James laid it out. I mean, we're part of the system. So even with other bottlers, we share lots of ideas, right? So, I mean, we have lots of global meetings every year where we get together with Hellenic or CCI or US bottlers or Latin America. So there's always been a culture of sharing within the Coca-Cola business, and I think that's one of the strengths, and it's very competitive. So James talked about discontent. You wanna be in a meeting where there's lots of bottlers in the room. It can get pretty ugly in a nice way. So we're super competitive. And I think that forces that sharing because people really are, to James's point, curious, but they wanna win. So from a system perspective, we kind of came in in a good place. You know, clearly internally, moving to different time zones, having a more longer flights to my market visits, so there's some complexities. But ultimately, you know, what we found, particularly with Amatil, was when we bought a business, all of our colleagues, they just wanted to be part of a bigger bottler that was committed to the long term, believed in the business, believed in the brands. And we were very fortunate, we kind of unlocked all of that optimism through the transaction. And, you know, I think that's the great thing about the Coke business. People join for the brand, and they stay for the people. So it is a bit more complex, but ultimately it's super exciting to have markets like the Philippines, Indonesia, Papua New Guinea, Pacific Islands. I enjoy my market visits in London and Paris. Papua New Guinea is just a bit more interesting when you get there, so it's not a bad problem. Well, you kind of answered it there, but my follow-up was going to be, I remember in the kind of the depth of the pandemic, all the bottlers kind of came together. I was just wondering, kind of after the pandemic, has that kind of increased collaboration and sharing? I mean, CCEP is renowned as a, you know, one of the best executors in the modern retail channel. Like, is there more sharing going on with the bottlers these days? Yeah, I think, I mean, the good thing about the bottling business is every bottler thinks they're the best. I think, you know, that level of competitiveness for more franchise territories, you know, to be a bigger part of the Coke system, that sense of stealing, learning, copying, and that continues. I mean, we do it throughout the P&L from a procurement perspective, through our global procurement network, so we maintain, you know, really competitive purchasing power. I think the area that we're now doing it more that we didn't do enough of is on digital and technology. So I see a lot more conversations now around how do we share more data, insights, what other bottlers are doing on platforms, frontline sales tools. So probably that's the area that I think we're spending more time on now. When we get together, we generally talk a lot more about technology, technology capability, digital, than we did previously. So that's, that's probably the, the focus at the moment. And perhaps just on that topic of digital, we obviously hear a lot about RGM, and you've even gone further with the revenue margin and growth management. Can you just talk about the runway there, but then also the other side of digital that maybe we speak a bit less about, such as, you know, digitizing the production facilities, the finance function, the areas there that you see can, again, help you drive stronger top-line growth and reduce volatility? Yeah. Yeah, Yeah, so we've, you know, we came under a little bit of pressure on our gross margin through COVID. Our business moved more to retail, and at that time we kind of recognized that we needed to make more money and make more margin in retail. And that's why we changed from revenue growth management to revenue and margin growth management, 'cause you can't really separate both of those. And that's been a key enabler of our growth, and I think it's really important today because, you know, there's lots of consumers that need support to enjoy our brands. So being able to manage pricing and packaging at a level that you don't lose consumers or shoppers. And you've seen that across other categories where private label or retailer brands have made big inroads. That hasn't happened in our category. And that's really down to being very choiceful around what pack, at what price, and what location. And obviously, all the technology and data insights that help us make that decision are really, really important. So there's still a long way to go. If you visit a supermarket in the U.K. today, we probably have about 200 SKUs. You know, you can buy a Coke today in the U.K. from GBP 0.50 up to GBP 12-14, and in between that there's significant packaging that allows you to access either for the occasion or the price point you want, and that's really critical. And if you go back to 2016, there was probably two packs that were 80% of our business. And now, as you see in that slide, we've spread it out much more, and that's all really driven by RGM. On the other side, you know, we've got 101 factories. We operate in over 30 countries. A lot of the people in our business are on our supply chain and front end, so there's a massive productivity opportunity. And, you know, we are in the middle of a very enjoyable journey moving to S/4HANA SAP. A fantastic event. If you haven't gone through it, I'd invite you to try it. And, you know, as painful as it is, and somewhat expensive, it's the last piece of the puzzle for us to really finish our integration because we are operating today on really three different systems. We've got Western Europe, the old Amatil business, and now the Philippines. That journey will allow us to move everything onto one platform. You know, we've committed a productivity program of $350 million-$400 million of savings, and that's all coming from unlocking productivity on the back end of the business. Not the frontline sales, we're growing that, but really in our supply chain. Excellent. On the topic of kind of digital and data, as we just heard from James, you know, Coca-Cola Company has a fantastic array of data. You've obviously got incredible levels of store-level data as well. How do you kind of marry these two data sets together to maximize the top-line revenue-generating possibility? Yeah. I'd say we're getting better, but I think we're still at the beginning of that journey. I think we got distracted a little bit by probably a conversation you've all had about creating a data lake. And that kind of a lot of people drown in that, to be honest. You focus on putting so much stuff in, and by the time you get it all in, you kind of go, "Well, why did we start this journey? And then, you know, what can we do with it?" So we've now kind of moved to more insights-driven. So with particularly with Manolo and the marketing team around: What's the problem or opportunity we're trying to solve? And then what insight do we need to help us do that? And then, based on that, then you can go and find the data you need to make the decision. And I think being much more choiceful through that lens allows you to go a lot quicker. It avoids massive cost of just putting everything into a central kind of repository that no one can figure out what to do with. But I'd say we're only at the beginning of that. I mean, we've got great customer insights, great consumer insights, so the combination is powerful. Yeah, so more to come... more to come on that, for sure. Kind of on that theme, I asked James the question, so I'll ask you: How would you characterize your relationship alignment with the Coca-Cola Company? I mean, from the outside, it does feel like it's stepped up a level throughout the pandemic, and shareholders would've seen some of the tangible benefits of that, such as the Amatil deal and then the Philippines. But what are perhaps some of the less visible benefits of the enhanced alignment? Yeah. I don't think it's good for my career if I give a different answer to James. So, I think James is great. He's amazing, so, no. So, I mean, I think fundamentally, on top of what James alluded to in terms of the shareholder mindset, the long-term mindset, I think having been in the business quite a while, probably the biggest change is how our financial performance is now integrated. So we call it incidence pricing. I mean, it's basically that, you know, both value streams are linked to the best price we can get for the consumer. And I think that's fundamentally changed the system because it really put everybody in the same focus, which is really around quality, quality growth at the top line. Prior to that, it was more volumetric, so you would see a lot more kind of lots of 24-pack cans for a cheap price or lots of 2-liter, and that led to that very narrow pack mix that I talked about earlier. You know, when the system moved to saying, "Listen, it's all about shared consumer value," that changed everything. And I think that is still probably one of the underpinning strengths of the business, is that despite that we'll have rows or we might kind of have a different opinion or, which is also a strength, 'cause it, it keeps both sides, I think, on, on top of their game. The fundamental creation of value in both, in both companies is, is driven by the same metric. Mm-hmm. To me, having been in the business a long time, that's, you know, lots of things have changed, but that's probably the most significant one for me. Excellent. And perhaps just on the theme of relationships, I wonder if you wanted to... Your relationships with your customers and the joint value creation strategy, where for a number of years now, CCEP has been the largest value creator in Western Europe. I think you're now also the largest value creator in Australia, New Zealand and the Philippines, and I think you mentioned recently, your products are very profitable as well for retailers. So long story short, CCEP is great for retailers. What benefits does that confer to you and CCEP from kind of a pricing or a shelf space perspective? Yeah, I mean, I think it's critical that you make money for your customers, right? So I think if they make money and grow, it's always a better place to be. So we've. When we set up CCEP in 2016, you know, I'd say the category in Western Europe was a bit unloved by our customers. Wasn't growing, you know, so it wasn't as attractive as we felt it should be. So we set a metric to be not just the number one in beverages, but the number one value creator in FMCG, so ahead of all of the CPG. And I think that, you know, that was a high bar, but it kind of transformed the way we thought about our category. So, you know, on that journey, a couple of things have happened. One, the category is growing. Western Europe is growing, you know, every year. It's growing in volume as well, which I think is really important. It's not just revenue. We've taken pricing probably versus the market, where we probably priced at around 60%, so we were very choiceful coming out of COVID on, you know, how we managed that pricing in a segmented way. So we've been pricing behind the market 'cause we're very, very conscious around affordability and growing households and growing penetration. But most importantly, as we've taken pricing, our retailers have generally taken a little bit more. So if you go back over the last 10 years, retailer margins in our category have probably moved from mid-teens to mid-twenties. And I think, you know, that's important 'cause, one, you get relevance for, for your customers. You're a big part of their profit pool. You're a big part of their growth. And as we come with more innovation, whether it's on brands or packaging, you're also a bigger part of the excitement that they want to bring to their shoppers or their consumers. So,