Winning in Convenience Retail

Winning in Convenience Retail Kelly Marr Group Director, Commercial Strategy NRS, Small Store Channel Strategy & Marketing infoshoppermarketing@coca-cola.com

Winning in Convenience Retail 2014 Clinton McKinney Group Director Category Advisory Confidential

Today's Discussion • State Of The Industry • Our Approach To Shopper Solutions And PITA • 2014 CR Strategic Imperatives • Innovation • Key Program Summary • Tools/Resources For Winning • Summary Confidential

Convenience Retail: Role of the Channel 2 3 1 MISSION ROLE OBJECTIVE To Be A Total Beverage Solution Provider To Our Customers, Resulting In Category Growth Leadership And System Profit Contribution “One Voice” Drive Consumer Recruitment And Consumer Brand Preference Through Immediate Consumption And “Ice Cold Refreshment” Occasions “Ice Cold Refreshment” Increase Our Volume, Profit And Share, And Become Our Customers’ Most Valued Supplier “Most Valued Supplier” Confidential

The State of the ConvenienceRetail Industry Confidential

The Future Is Bright In Convenience Retail 10K New Stores Opened in Last 5 Years 170MM More Trips Made To C-store in Past Year $5.5B in Incremental in Store Sales in Past Year Source: Nielsen TD LINX; NPD Convenience Store Monitor Confidential

Many Challenges Remain Pressure on Gas (Cost, MPG, Habits) Unemployment Slow to Improve Consumer Confidence Improving, But A Long Way To Go Source: Nielsen TD LINX; NPD Convenience Store Monitor Confidential

Competition for Convenience Top 5 in Total Stores Top 5 in Store Growth 13,400 New Stores Mass Merchandisers Grocery C-Stores DrugStores Dollar Stores % of U.S. Store Count Expansion in the Top 20 Expansion Chains – 2012 vs. 2007 Source: Nielsen TD LINX; Confidential

Competition for Convenience Top 5 in Total Stores Top 5 in Store Growth 13,400 New Stores Mass Merchandisers Grocery C-Stores DrugStores Dollar Stores % of U.S. Store Count Expansion in the Top 20 Expansion Chains – 2012 vs. 2007 Confidential

Food Service On Fire Confidential

Cold Vault Under Pressure 44% Trips Where A NARTD Bottle/Can Beverage Is Purchased Trips For Beer 5% Source: Nielsen TD LINX; NPD Convenience Store Monitor Confidential

Changing Shopper Landscape Key CR Shopper Segments That Are Growing • 24% Have HHIncome <$25K (+1.5) • 9% are Students(+2.2) • 21% are 25-34Years Old (+1.3) • 46% are Female(+1.3) Source: NPD Conventional C-store Demographics 12 ME March 2013 Confidential

PITA – The Framework for Driving Category Value P I T A x x x SHOPPERS IN YOUR STORES SHOPPERS BUYING THE CATEGORY TIMES THEY PURCHASE AMOUNT THEY SPEND Store Households (Category) Penetration Trips per Household Net $ per Trip Confidential

2014 Convenience Retail Direction Doug Middlebrooks AVP, Commercial Marketing & Operations

Convenience Retail Channel Priorities Drive IC Beverage Conversion Across the Outlet 1 Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions 2 Accelerate Foodservice Beverage Incidence & Grow Average Check Size 3 Drive Fill-in Trip Consideration & Conversion 4 Address Critical Focus Shopper Groups: Blue Collar, Hispanic, Teens F1 Create Customer Value via Shopper & Customer Solutions, System Expertise and Industry Leadership F2 Confidential

Convenience RetailChannel Initiatives Sustained Impulse Zone Activation Coke with Meals Activation – All Day Coke with Snacks Power of Many Partnerships Maximize Innovation & Expand Space Targeted Coca-Cola Freestyle and Frozen Expansion Activate Big Events & Shopper Passion Points Drive Traffic & Fill In Conversion with FC Confidential

1 Sustained Impulse Zone Activation Drive IC Beverage Conversion Across the Outlet • Timing = Annual, Ready to Sell T3 2013 • Refreshed insights • Nearly 1 out of 5 Bottle/Can beverages are purchased on impulse. Source: NPD CSM 2012 • Pilot Market Learning from T2 • Full Year In and Out Offerings supported by Marketing • Secure permanent equipment as #1 priority; Food Case and barrels secondary; Ambient Tertiary Confidential

1 Sustained Impulse Zone Activation Drive IC Beverage Conversion Across the Outlet 16oz Assumptions: 16oz in Cold Vault, Everyday $.99 Incremental placement in open-air dairy or sandwich cases Pilot Markets only 16oz $.99 in Cold Vault 16oz Thermo “Cubes or Snowflakes” 16oz Thermo #1 Starts January “Cubes” 16oz Thermo #2 Launch pre-Memorial Day New Creative for Summer Coke, Sprite, Surge (TBD) $.99 Share a Coke Exact packages and timing TBD Share a Coke 20oz and 16oz PET Assumption: 19.2oz = In/Out Package in barrels and FEMs: Single retail $1.19 or $1.29; Multiple retail 2/$2 or 2/$2.22 Coke and Sprite (Fanta and Coke Zero TBD) 19.2oz Coke Zero Ch Coke Zero $.99 Confidential

2 Coke with Meals Activation – All Day Accelerate Foodservice Incidence and Grow Average Check Size • Timing = Annual, Ready to Sell T3 2013 • Refreshed insights • Meals and snack sales are up +4.1%. Source: NPD CREST YE Feb 2013 • Top brands consumed with lunch are Coke and Diet Coke. Source: CBL 2011 • Coke with Food Brand Preference and Legacy • Around the Clock, Around the Store • Day-part Strategy: Breakfast, Lunch, Grab & Go • Meals creative platform enabling consistency and efficiency around Meals activation … Expanded Design Machine capabilities Confidential

3 Coke with Snacks Power of Many Partnerships Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions • Timing = Annual, Ready to Sell T3 2013 • Refreshed insights • PM Snacking accounts for 41% for meals & snack traffic.Source: NPD CREST 12 ME Feb ‘13 • PM Snack occasion is up 2% in traffic driven by that young millennial, a key shopper in CR Source: NPD CSM12 ME 1stQtr‘13 • 1 out of 2 CR trips include a purchase of only 1 item. Source: ishop 2012 • Powerful, Sustaining Partnerships with Leading Snack Companies (Mondelez, Kelloggs, Hersheys, General Mills) • A robust, flexible capability to create shopper andretailer relevant offerings by utilizing industry leadingtools and insights (ADOPT, Resource Guides, Design Machine templates) Confidential

4 Maximize Innovation & Expand Space Drive Beverage Conversion Across the Outlet • Timing = T1 2014, Ready to Sell T3 2013 • Refreshed insights • Having unique and appealing products are important on 38% of trips. • Source: ishop 2012-Top 2 Box • Full Operating Plans by late T2 2013 • Live Samples for sell in • Pilot market learning and consumer testing • Early year timing and spacemanagement support • Leverage Accordion to establish strategic importance of Beverages to influence Display, Points of Inspiration & Store Design Having Unique and appealing products - important on 38% of trips" Confidential

5 Targeted Coca-Cola Freestyle & Frozen Expansion Accelerate Foodservice Incidence and Grow Average Check Size • Timing = Annual, Ready to Sell T3 2013 • Refreshed insights • A large number of 25-34 year olds are driving traffic to C-stores (up 1.3 pts). They tend to seek different experiences that only this channel can offer like Coca Cola Freestyle and Frozen Beverages. Source: NPD CSM 12 ME Mar 2013 • Coca-Cola Foodservice at RetailResource Guide • Coca-Cola Freestyle Marketing Sharepoint • Dispensed Selling Story for CR Confidential

6 Activate Big Events & Shopper Passion Points Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions • Timing = Annual, Ready to Sell T3 2013 • Refreshed insights • CR shoppers have key passion points like NASCAR. 18% of CR shoppers are very or somewhat interested in NASCAR indexing at a 119 compared to all other shoppers. Source: Scarborough 12 ME Sept 2012 • Powerful calendar of Major Events, aligned with consumer passions • Combination of National Scale andLocal Relevance • Shopper Marketing Expertise Confidential

7 Drive Traffic & Fill In Conversion with FC Drive Fill-in Trip Consideration & Conversion • Timing = Annual, Ready to Sell T3 2013 • Refreshed insights • Fill-in trips are very valuable trip to CR as the basket is 75% higher than an average Grab & Go trip. Source: ishop 2012 • 10% of trips to CR are the Fill-In for Food and Beverages . Source: ishop 2012 • Exciting new innovation for 2014 … The Sixer! • PRGM Excellence coupled with Marketing Pull • Incremental ambient merchandising of smartwater and 1.25L SSD Confidential

2014 Convenience Retail LOS Calendar – General Market T1 T2 T3 KO Winter Olympics KOZ NCAA KO World Cup Ahhh Coke/ Coke Flavors KOZ Fall Football KOZ Gaming KOZ Gaming CV – Core SSD JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC Flavors Pricing Activation CV – Flavors SSD NOS MMA NOS NASCAR NOS Active MMA NOS MMA NOS MMA CV – KO Energy KO Energy 2/$X PA NCAA PA World Cup PA Football PAZ Olympics CV – Sports Drinks Mix, Match, Hydrate (PA 32oz, vw 20oz, sw 700ml) vitaminwater 20oz/32oz Text4Tix CV – IEW Dasani Drops Small Size Bundle (tbd) CV – Water Fuze $0.99 1L CV – Tea MMJTG 2/$3 MMJTG Gas fora Year Contest MMJTG 2/$3 (tbd) CV – Juice Share a Coke - TBD NASCAR 19.2oz NASCAR 19.2oz Fall Football 19.2oz Impulse Zone KO/KOZ Hershey’s Combos Snacks AM/PM Combo DaypartCoupon Meals Dispensed Promo KO World Cup KOZ Fall Football KO Holiday KOZ NCAA KO Winter Olympics KO World Cup Ahhh Coke/ Coke Flavors KOZ Fall Football KO Holiday KOZ NCAA SSD FC Smartwater Racks PA NCAA PA World Cup PA Football smartwater rack Still Ambient PA World Cup Confidential

Channel Tools & Enablers ✔ Enhanced Foodservice Tools: Foodservice in Retail Page, Freestyle Marketing Guide ✔ NEW Automated LOS for CR ✔ Category Advisory and K&I Support Confidential

Winning in Convenience Retail in 2014 Drive IC Beverage Conversion Across the Outlet 1 Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions 2 Accelerate Foodservice Beverage Incidence &Grow Average Check Size 3 Drive Fill-in Trip Consideration & Conversion 4 Address Critical Focus Shopper Groups: Blue Collar, Hispanic, Teens F1 Create Customer Value via Shopper & Customer Solutions, System Expertise and Industry Leadership F2 Confidential

THANK YOU For additional information please visit the Shopper/Customer Marketing Community at www.KOSCMarketing.com

Winning in Convenience Retail