The Coca-Cola Company saw its net revenues decline 16% in the first quarter of the year to $7.63 billion, as it was impacted by a 26% headwind from the refranchising of its bottling territories.
It achieved volume growth across all its geographic operating groups and was boosted by the return to growth of Diet Coke following a full brand overhaul. Gross profit was down 13% to $4.89 billion.
In its North American business – Coca-Cola’s largest unit – revenues surged 11% as the company’s sparkling soft drinks volumes grew 3%, including a double-digit growth of Coca-Cola Zero Sugar. However, volumes of juice, dairy and plant-based beverages declined by 2%.
The company drew attention to its expansion in on-trend categories. After the recent acquisition of the US rights to Topo Chico premium sparkling mineral water, the company was able to extend the brand’s reach through increased distribution; it grew its US retail value over 30% during the quarter.
Coca-Cola also said it was able to leverage its strength in distribution to lift, shift and scale its brand around the world. Fuze Tea, which was already available in 49 countries, was introduced in an additional 37 countries across Europe, featuring new herb and fruit-infused flavours with fewer calories. The single-day launch of Fuze Tea in Europe was executed on a scale that was unprecedented in the company’s history.
James Quincey
Coca-Cola CEO James Quincey said: “We’re encouraged with our first-quarter performance as we continue our evolution as a consumer-centric, total beverage company. We have the right strategies in place and remain confident in our ability to achieve our full-year guidance.”
The rebranding of Diet Coke – which was the brand’s biggest ever makeover – was announced in January and featuring updated packaging and the introduction of four new flavours: ginger lime, feisty cherry, zesty blood orange, and twisted mango.
Coca-Cola spoke to more than 10,000 people across the US to get their ideas and inputs on potential flavour extensions, packaging updates.
In March, the company completed the refranchising of its bottling operations in North America as a non-binding letter of intent to acquire the company’s Canadian bottling business, Coca-Cola Refreshments Canada, was signed.
Last November, Coke completed the refranchising of its US bottling operations, representing 60 transactions. It said the refranchised system is working to reinvent the future of the business, “especially in key areas such as portfolio diversification, packaging innovation, production, procurement, technology and pricing”.
The aim is for the Coca-Cola system in North America to be comprised of economically aligned bottling partners that have the capability to serve major customers, coupled with the ability to maintain strong, local ties across diverse markets.
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