Led by Finance: The Finance Team of Coca-Cola's Bottling Investments Group, under Doug Bonthrone, ACMA, CGMA (Recently Retired as Coca-Cola's Director of Global Services Strategy), Spearheaded a Hedging Project to Manage $5Bn-Worth of Commodity Risk Exposure

Financial Management (UK), July-August 2013 | Go to article overview

Led by Finance: The Finance Team of Coca-Cola's Bottling Investments Group, under Doug Bonthrone, ACMA, CGMA (Recently Retired as Coca-Cola's Director of Global Services Strategy), Spearheaded a Hedging Project to Manage $5Bn-Worth of Commodity Risk Exposure


ALTHOUGH AN AD-HOC commodity- and currency-hedging operation was in place (run by the corporate treasury team), there was neither a view of the commodity risk throughout Bottling Investments Group (Big) nor a co-ordinated plan for tackling it. The project aimed to address these shortcomings at a time of heightened commodity-price volatility. Price rises were being driven by various factors, including increased demand for commodities; production constraints compounded by adverse weather; political interference in producing countries; and the growing influence of speculators in commodity markets.

[ILLUSTRATION OMITTED]

IN 2008 the new hedging plan proposed by Big's finance team was approved. Treasury would be involved in deciding what hedging to do and how, and then executing hedges if forward contracts/derivatives were involved. In less-developed markets that didn't have an approved commodity exchange, hedging would often be done by physical means--ie, by buying and stockpiling commodities such as sugar and resin (for use in making PET bottles).

THE NEW APPROACH was based on buying commodities competitively and achieving year-on-year consistency in their overall unit cost. Hedging decisions were based on a number of variables, including forecast commodity requirements over several periods, as well as current commodity prices relative to historical prices and the outlook for prices in the short and longer term. The outlook was developed by using data received from a range of sources, including commodity traders, trade bodies and investment banks. In this way, the view on commodity prices was based on specific data and broader global themes.

[ILLUSTRATION OMITTED]

A TEAM INVOLVING the president, the corporate treasurer and the heads of finance and procurement worked with the CEOs and the finance and procurement managers of all of Big's local operations to decide which commodities to hedge, at what price and over what period. Each operation provided local intelligence on commodities, while the group team provided macro viewpoints on commodities and an overall perspective on risk. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Led by Finance: The Finance Team of Coca-Cola's Bottling Investments Group, under Doug Bonthrone, ACMA, CGMA (Recently Retired as Coca-Cola's Director of Global Services Strategy), Spearheaded a Hedging Project to Manage $5Bn-Worth of Commodity Risk Exposure
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.