coke mcd-asks brochure 2.20.indd 1-2 2/20/17 11:40...

Coke_McD-Asks_Brochure_2.20.indd 1-2 2/20/17 11:40 PM

Modernizing the Beverage Experience .............3-4

Refreshing the Fountain ......................................5-6

Innovating Sprite..................................................7-8

Elevating McDelivery .........................................9-10

Evolving McCafé OJ ........................................11-12

Introducing Honest Kids ..................................13-14

Appendix ..........................................................16-30


BEVERAGE EXPERIENCE

modernizing the

MCDONALD’S ASKS | 43

PROMOTIONSSPECIALTY BEVERAGE

DIGITAL ADVERTISING

ASK Freesyle Investment

• By the end of 2017 Coca-Cola/Cornelius to invest in the installation of new Freestyle dispensers in Florida Region (900 stores) with 100% funding to prove business case

• Coca-Cola to develop a 12 month activation/innovation plan in Florida

ANSWERYes, we can deliver and fund an integrated solution with Cornelius that incorporates the best components to drive beverage sales, consumer experience and operational efficiency.

• Committed to market ready equipment by April 2018 and a full in market Florida solution by September 2018.

BUILDReached agreement with Cornelius and would like lead McDonald’s Equipment engineer to drive process collaboratively. Continue to move forward with the McDonald’s Fountain 2020 which would include the following:

• Integration for Bulk Coke and Diet Coke flavor profile

• Integration with Multiplex to facilitate McDonald’s beverage volume requirements

• Consumer interface, connectivity, and microdosing are Coca-Cola led

Should develop 2019 EOTF requirements to integrate beverage solution.



REFRESHING

the fountain

ASKFountain Valve Refresh

By April 2017, add Fanta and DASANI Sparkling to all McDonald’s fountain valves in the US

LAUNCH PROMOHALLOWEEN PROMOTION

MERCHANDISING HALLOWEEN

ANSWERCan do all without Dasani Sparkling by September 2017. Cannot receive materials for Dasani Sparkling for 10 months.

• Will have following lineup – Coke, Diet Coke, Sprite, Dr. Pepper, Sprite Mix, Fanta, Regional Flavor, Healthy Halo Still.

• Dasani Sparkling – not an option on current equipment – based on pungency of lines.

• Dasani Sparkling can be delivered via slim line can.

BUILDHave “national style” activation for Sprite Mix and Fanta. Will increase national marketing dollars with converted valves. Must “rightsize” Diet Dr. Pepper to regional preference area and include no locally funded conversions as part of agreement. Must agree to changes as revisions to the Letter of Agreement.



INNOVATING

SpriteASK

Sprite Innovation

• Beginning in 2018, Coca-Cola to launch 1 (consumer validated) proprietary fountain Sprite Flavor each year across all restaurants

• Coca-Cola to provide exclusivity for 12 months to McDonalds

LAUNCH PROMO MERCHANDISING UBEREATS EVENT

ANSWERYes, we are committed to a proprietary and exclusive Sprite sub brand (current working concept Sprite Mix) to drive interest and innovation for Fountain. Can deliver by September 2017, possibly earlier, depending upon approvals.

BUILDCan accelerate Sprite Innovation to be pushed up to earlier in Q3. All Valve changes will be completed at once.

Required national merchandising commitment



ELEVATING

McDeliveryASK

Delivery Launch Plan

• Delivery will launch nationally July 2017 with UberEATS and reach 3500 restaurants

• Coca-Cola to provide complimentary beverage recommendation for delivery (pack sizes)

• Coca-Cola to create 500MM impressions in support of delivery launch

• Coca-Cola to offer incentive for first time triers of McDonald’s UberEATS

ANSWERYes we can.

• We will deliver a holistic marketing campaign to drive consumer awareness, trial and unique experience - have plan to drive orders, repeat, and consumer choice

• We will provide drive thru and front of house cooler options (floor and countertop) with 3 options for placement

BUILD• Participating restaurants for Delivery program must sell RTD for in restaurant and drive

thru purchase as well

• 12 week lead time for coolers

• Assumes 50 percent of delivery orders will be fountain

• Provide choice in core beverages plus fill in with hydration, energy, healthy halo depending on restaurant location and equipment

serve with a

LAUNCH PROMO MEDIA DIGITAL / SOCIAL



EVOLVING

McCafé OJ

ASKMcCafé OJ

KO to produce an NFC RTD bottled McCafé OJ we can sell in coolers (with DASANI) in all our restaurants

ANSWERCan produce a cobranded MM Pure Squeezed product with lead time for decision required to procure juice crop and build line capacity (by March 2017 for an in restaurant date for June 2018)

Recommend Region wide test to understand consumer preference of package and brand on OJ offering for decision date of March 2018

BUILD Request Region wide test with following cells:

1) Optimize – Current Dispensed FC OJ – Pricing/Merchandising/Cup Sizing/Branding

2) Minute Maid branded Dispensed FC OJ in restaurant; Minute Maid branded FC OJ bottle for drive thru

3) McCafé branded Dispensed FC OJ in restaurant; McCafe branded FC OJ bottle (by Minute Maid) for drive thru

4) McCafé by Minute Maid Pure Squeezed NFC bottle for both in restaurant & Drive Thru

5) Simply Branded NFC bottle for both in restaurant & Drive Thru

These cells intended to test Brand, Pack, Price and Product Preference and impact on restaurant operations and economics.



INTRODUCING

Honest Kids

PACKAGING MERCHANDISING DIGITAL / SOCIAL

ASKHonest Kids Juice boxes

Coca-Cola to provide Honest Kids juice boxes for Happy Meal option in all restaurants by summer 2017 at cost parity

ANSWERYes, we can move to Honest Kids Appley Ever After Juice drink 6oz box.

• With a February 28th decision, system-wide implementation to begin by August as a soft roll with System conversion completed by end September

• Would build a 50 count case as a benefit to McD’s system

• Only 35 calories / serving. Product has no added sugar, no artificial coloring, and no artificial flavors

BUILD• Current case count is 40 drink box servings. We plan to optimize McD’s system cost

by launching with a 50 ct case

With a decision to launch we will build out our organic raw material supplier and work with McDonald’s supply chain for assured supply.



Appendix



BEVERAGE EXPERIENCE

modernizing the

Operational Considerations

• CCFS + Cornelius Prototype to begin development to include:– Integration for Bulk Coke and Diet Coke flavor profile– Integration with Multiplex to facilitate McDonald’s beverage

volume requirements– Non-nutritive sweetener in 2.5 gallon BIB– In store field test (10-25 dispensers) to occur within 8-10

months of decision (end of 2017)– Commercialization to occur 2-3 months after in store field

test (April 2018)• Activate DCs to carry cartridges from the onset• Requires full commitment from McDonald’s engineering and

development• Will train and activate CCNA Service Providers across FL to

work on McD Equipment (e.g., modifying Pythons to support removal of legacy equipment)

• Engage and contract McD GCs to perform site prep (e.g., adding electrical outlets, performing counter modifications, and installing ice makers, etc.)

• Engage KES to shore up supplies of capital components and small wares

• Identify and contract climate-controlled storage facilities to store legacy equipment if required

• Coca-Cola and Cornelius to co fund development and test. Test will place equipment at no charge and will be sold to operators after complete

• Operators must buy cartridges and syrups. All other cost and activation covered.

Research Implications

• The Coca-Cola Freestyle dispenser puts the power of choice and customization in the hands of the consumer via a modern and progressive delivery platform.

• Coca-Cola to lead agreed upon testing protocol funded by Innovation Budget.

Calendar

• Alpha test CCFS + Cornelius Prototype by end of 2017• Introduce at McDonald’s Worldwide Convention in April 2018 • Florida region 900 store test with installs to be completed in Q4

2018 (target final install by September 1, 2018)

Coca-Cola Freestyle: Your Choice, Your Way




• Material sourcing for python replacement is time and cost prohibitive based on timing of Freestyle launches

• Current system limitations and age of equipment will limit certain restaurants

• Carbonation and pungency drive certain limitations• Coca-Cola can accelerate change outs with the delay of Dasani

Sparkling from fountain consideration• Need to limit choices and have certain flexibility depending on line and

equipment limitations• Proposed line up leaves 2 local valves where one must be healthy halo

still and one super regional choice.


Current research suggests limited downside to changes and all upside coming from proper activation of Sprite innovation.

Calendar Launch September 2017

Other Considerations

• On trend with consumers changing needs and desires. Distinctly differentiates McDonald’s with exclusive Sprite Innovation.

• Maximizes unduplicated reach and frequency and grow sales and store operating profits.

• Coca-Cola, Diet Coke, Sprite, Dr. Pepper, Fanta and Sprite Innovation to deliver on stated strategic objectives, leaving 2 Valves for Regional Optimization.

REFRESHING

the fountain



INNOVATING

Sprite


• First launch is limited by time and pungency of lines

• Coca-Cola will develop a sub brand to be used exclusively at McDonald’s and will develop an agreed upon cadence of innovation change outs dependent upon consumer and operator preference


• Consumer testing of future innovation to be funded by innovation budget

Calendar • Launch September 2018

The Sprite in You: You Make the Flavor



ELEVATING

McDelivery UberEATS: And Ice Cold Drinks – Journey


• Ensure beverage quality, temperature are within acceptable range• Coca-Cola concerned with quality, handling and potential tampering of

open beverages - observed and measured in test market• Offer immediate consumption packages for easy portability,

resealability and added choice• Optimize existing cooler or place new cooler: GS3 countertop

or GCG9


• Validate consumer preference for delivery package type when installed

• McDonald’s to supply Coca-Cola usage data from UberEATS and GMA to better refine offers

Calendar

• Complement McDonald’s McDelivery launch plans• Support with digital marketing plan designed to ignite demand,

trigger action, extend experiences (geotargeted; MCR; social influencer; Coca-Cola assets; Coca-Cola led social media buy)

• July (12 week lead time)

Other Considerations

Holistic plan to connect with consumer throughout the delivery journey• Provide 20oz Bottle neckringers with special McDelivery Promo

Code to support launch• Discover: Drive trial and awareness with big promotion supported by

in restaurant, digital and social media• Order: Increase average check via UberEATS mobile offers• Process: Improve order frequency leveraging special GMA offers on

next purchase• Prepare: Provide choice and preferred package through RTD and

cooler placement program• Deliver: Ensure quality drink experience perfectly paired with

McDonald’s entrees• Repeat: Encourage repeat order via mobile offers and RTD

neckringers

serve with a




• Product is shipped chilled and must be continuously chilled • Dispensed chilled OJ concentrate shelf life is 70 days

Determine cooler options for back counter replacing C009 dispenser


• Brand – McCafe or Minute Maid or Simply• Package – Dispensed/Bottle • Product – NFC or FC• Occasion – Drive thru vs Dine in• Price – Premium vs line price• Operations – storage and staging• Economics – effect of incidence improvement and margin

Calendar• System conversion would require a decision by March 1, 2017 in order

to develop an orange raw material sourcing strategy.

EVOLVING

McCafé OJ

Evolving – McCafé OJ



INTRODUCING

Honest Kids

Honest Kids: Honestly Good!


• Would develop a 50 ct case to optimize McD operational cost• Requires McDonald’s to modify CGI agreements• Honest Kids Appley Ever after Juice drink box has shelf life of 243 days• We will build out our organic raw material supplier base as a strategic

strategy to mitigate risks on assured supply though annual risks include– Organic Apple Juice concentrate demand is challenging supply for

long term. – Issuing contracts to suppliers for raw material does not guarantee

supply. The material goes through quality testing – if testing fails then the supply is rejected which can challenge supply

Calendar• Soft launch planned for August with anticipated system conversion by

September 2017



SUPER REGIONAL BRANDS

Barq’s Root Beer

Fanta Flavors

Sprite Zero

Coca-Cola Zero

Cherry Coca-Cola

Seagram’s

Mello Yello

HEALTHY HALO

PoweradeFruit Punch

PoweradeMountain Blast

Minute MaidFruit Punch

Vitaminwater XXX

Vitaminwater Revive

Minute MaidLight Lemonade

Region-Level Summary of Recommendations


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