The Coca-Cola Company has announced that its global sales volumes have fallen 25% this month due to Covid-19 disruption, as the company reported flat Q1 revenues.
The company – which owns major beverage brands including Coca-Cola, Sprite, VitaminWater and more – reported Q1 revenues of $8.6 billion, representing a fall of 1% when compared to the same period last year.
In addition, the company’s operating income declined marginally by 2% to $2.38 billion. Unit case volumes of sparkling soft drinks declined 2% in the quarter, while juice, dairy and plant-based beverages were down 6% and tea and coffee volume declined 6%.
Coca-Cola had experienced a strong full year in 2019, and the company claims that at the end of February, the company was growing volume by approximately 3% – excluding China – and was on track to achieve its full-year 2020 targets.
However, disruption due to Covid-19 in global markets from March significantly impacted sales, as social distancing measures and quarantine orders were put in place by governments around the world. Away-from-home channels typically account for half of Coca-Cola’s total revenues, so the impact of temporary closures in the away-from-home sector far surpassed an initial rise in at-home purchasing due to stockpiling.
The company anticipates that the continued reduction in away-from-home activity will have a “significant impact on second-quarter results”.
A statement in the company’s quarterly earnings release said: “The ultimate impact on the second quarter and full year 2020 is unknown at this time, as it will depend heavily on the duration of social distancing and shelter-in-place mandates, as well as the substance and pace of macroeconomic recovery. However, the impact to the second quarter will be material.”
James Quincey, chairman and CEO of The Coca-Cola Company, added: “We sincerely thank those who have been working to keep all of us safe through the crisis, particularly those on the front lines in the healthcare community. I also want to recognise our system associates, who are ensuring we can continue to supply beverages around the world.
“Our approach to navigating the pandemic is grounded in our company’s purpose, which ensures that we continuously strive to make a difference for people in the communities we serve around the world.
“We’ve been through challenging times before as a company, and we believe we’re well positioned to manage through and emerge stronger. The power of the Coca-Cola system is our greatest strength in times of crisis. The resilience of our people, the equity of our brands and the strength of our bottling partners continue to be competitive advantages in the market.”
© FoodBev Media Ltd 2020