Coca-Cola posts 11% drop in 2020 amid pandemic pressure

The Coca-Cola Company has recorded a 11% decline in net revenue for the full-year, following ‘incremental pressure’ amid the pandemic during Q4.

The company posted full-year net revenues of $33 billion and operating income of $8.997 billion, representing an 11% drop since the same time last year.

Coca-Cola says that while volumes broadly remained resilient particularly in at-home channels, it experienced incremental pressure in December and into the early part of this year due to a resurgence of the coronavirus in many parts of the world.

The company witnessed its net revenue drop by 5% in Q4, which is less steep than previous quarters. Global unit case volume declined 3% in Q4 and 6% for the full-year, as continued strength in at-home channels was more than offset by coronavirus pressure in away-from-home channels.

Sparkling soft drinks fell 4% for the full year due to pressure in the fountain business in North America and away-from-home channels in Western Europe. This was partially offset by growth in China, Brazil and Nigeria. During 2020, Coca-Cola says it prioritised its core brands which resulted in Trademark Coca-Cola volume growing 4% for the year, led by Coca-Cola Zero Sugar.

Despite a ‘solid performance’ by its Simply and Fairlife brands in North America, the company’s juice, dairy and plant-based beverages were offset by a decline in Minute Maid in the fountain business, resulting in a 9% drop in 2020.

Water, enhanced water and sports drinks declined 11% for the year, while tea and coffee fell 17%, primarily driven by coronavirus-related pressure on the company’s Costa retail stores. Coca-Cola’s global ventures unit saw its revenue decline by 22% due to Covid-19 pressure on Costa retail stores; nevertheless, Costa Express machines in the UK performed well.  

For the full-year, Europe, Middle East & Africa net revenues fell 14%, Latin America declined 15%, North America 4%, Asia Pacific 11% and bottling investments 16%.

The owner of Sprite and Smartwater says it has continued to make progress in establishing its networked organisational model, which became effective 1 January 2021. 

James Quincey, chairman and CEO of The Coca-Cola Company, said: “The progress we made in 2020, including the actions taken to accelerate the transformation of our company, gives us confidence in returning to growth in the year ahead. While near-term uncertainty remains, we are well-positioned to emerge stronger from the crisis, driven by our purpose and our beverages for life ambition.”

While there are still uncertainties related to the pandemic, Coca-Cola has reinstated its guidance and is providing its 2021 outlook as it expects to record high-single-digit organic revenue growth.