3.9 billion cases. That’s how much Coca-Cola Europacific Partners (CCEP) sells in drinks every year. This hefty volume is distributed across 31 countries between Europe, Oceania and Southeast Asia. In these regions, CCEP works hard to meet their consumer demands. But consumers can be unpredictable. 

Many factors have an impact on people’s thirst-quenching habits. Public holidays can escalate sales of their products. Such events are generally predictable. But what happens when an unseasonably rainy August spoils the nation’s barbecue plans? Heat waves, rainfall, and similar events are largely unpredictable, and can drastically affect sales for CCEP. 

Smith Institute has been working with CCEP since 2018, using our expertise to help them understand sales performance data and how it is affected by external factors. Using machine learning, data science and decision intelligence, we unlock insights into optimised marketing, sales and promotion strategies. This allows CCEP to dynamically meet consumer demand and thrive in a competitive global industry. 

UNDERSTANDING THE IMPACT OF UNPREDICTABLE FACTORS

The Challenge

Sales performance is impacted by many factors, both internal and external. Internal factors which are controllable, like successful marketing and promotional strategies, lead to boosts in demand and sales. But external factors are uncontrollable. We can’t control the weather, and this plays a major role in sales for CCEP.  

External factors affecting sales performance have varying degrees of predictability. Prominent holidays in the yearly calendar are predictable. Temperature and climate fluctuations are unpredictable. All these external variables have complex, interlinked relationships. Combined, they create peaks and troughs in sales performance, independent of marketing and promotional strategies.  

There's no shortage of sales performance data. This means that CCEP’s strategy can be optimised by applying a data-led approach, providing clear insight into their sales performance. To plan an effective strategy, we require a deep understanding of the business' performance. Therefore, we need a deep understanding of how performance is impacted by unpredictable external factors.  

With a data-led approach, we can create a model that allows CCEP to ensure sufficient supply is available during predicted high demands. Simultaneously, they can navigate predicted periods of low demand by boosting marketing and promotional support. In a business worth £20bn annually, such optimised decision-making can reshape the competitive landscape. 

UNDERSTANDING THE PRESENT AND FORECASTING THE FUTURE

The Solution

We work closely with CCEP’s business intelligence team. We perform sophisticated statistical analysis that reveals the relationship between both predictable and unpredictable external factors, like the weather, and their impact on CCEP sales. 

Our machine learning model requires an understanding of the relationship between these factors over a significant period. This is a challenge, as there is no ‘control’ element that remains stable for any length of time. 

To overcome this, once our model calculates a weighting for each element CCEP needs to understand, we can strip away its positive or negative impact on sales data. This leaves CCEP with a true reflection of their sales performance without external factors.   

The model also determines which external factors play the most significant role in both positive and negative impacts on their sales performance. We report to CCEP weekly, delivering to them a comprehensive summary of how sales are being impacted by the weather, and forecasting future sales dependent on weather predictions.  

This information is shared using clear and insightful data visualisations. This makes our analysis accessible, allowing it to be understood and used by both technical and non-technical end-users, including executives across the business. 

SUPPORTING DATA-LED PROACTIVITY

The Result

Smith Institute’s expert statistical modelling provides CCEP with deep business intelligence on the effect of multiple drivers in consumers’ buying preferences. 

Understanding how certain types of weather impact sales means that CCEP can take proactive steps to use their marketing budget effectively. They can maximise the potential of spikes in sales and mitigate shortfalls with promotions and increased marketing. This enhances their strategic marketing performance, so they reach consumers with the greatest demand at the opportune moment.