The Coca-Cola Company recorded a 15% net operating revenue decline in 2017 to $35.41 billion as it continues to refranchise its bottling operations. For the year, operating income was down 13% to $7.5 billion.
Coke, which finalised the refranchising of its US operations last year, saw its net operating revenue shrink 20% in the fourth quarter to $7.51 billion and operating income decline 3%.
Following the introduction of the Tax Reform Act last year, Coca-Cola is required to pay a tax on historical offshore earnings that have not been repatriated to the US. The impact of these items resulted in a one-time net charge of $3.6 billion at the end of the year.
In 2017, the company’s sparkling soft drinks unit saw volumes decrease by 1%, while juice, dairy and plant-based beverage volumes were flat. However, water segment volumes rose 1%, while tea and coffee increased by 2%.
Hit by falling soda sales, Coca-Cola has sought to retain interest in its own-brand beverages with a Diet Coke makeover and new flavours planned this year. It also launched a revamped Coca-Cola Zero Sugar in Europe last year.
Meanwhile, in the face of sugar taxes it plans to shrink the sizes of its Coca-Cola bottles in the UK while also raising prices.
It is also under threat from Keurig Dr Pepper, an entity to be created after Keurig Green Mountain completes its acquisition Dr Pepper Snapple, creating a drinks conglomerate with $11 billion in annual revenue.
The Coca-Cola Company CEO James Quincey said: “I am pleased with our accomplishments and results in 2017. We achieved or exceeded our full year guidance while driving significant change as we continued to transform into a total beverage company. While there is still much work to do, I am encouraged by our momentum as we head into 2018.”
For 2018, the company aims for approximately 4% growth in organic revenues.
© FoodBev Media Ltd 2020
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