Coca-Cola posts upbeat first quarter results thanks to focus on healthier drinks
Slimming down its operations and revamping its products for healthy-minded consumers helped Coca-Cola boost its first-quarter sales, beating analysts’ estimates.
The world’s largest beverage company said that increasing demand for Coke Zero and the rebranding of Diet Coke in sleeker tins and flavours helped to encourage positive volume growth in North America.
The Atlanta-based firm has been selling off its bottling facilities in recent years to refocus on its vision as a “total beverage company”.
After a lengthy transition, the strategy says that this strategy is helping the company stay on-track to achieve its full-year targets,
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Coca-Cola’s net revenue fell 16% to $7.34bn, due to the divestment of its bottling operations, beating analysts’ estimations of $7.34bn.
The beverage company said that its saw positive volume growth of 3% and also noted that organic sales - which excludes gains from acquisitions or divestitures - rose 5% in the first quarter.
"We're encouraged with our first quarter performance as we continue our evolution as a consumer-centric, total beverage company," said James Quincey, President and CEO of The Coca-Cola Company.
"We have the right strategies in place and remain confident in our ability to achieve our full-year guidance."
Coca-Cola’s results were also lifted by its portfolio of sparkling waters with the carbonated versions of its Dasani and Smartwater brand’s seeing double-digit growth.
The beverage giant’s recent acquisitions have also paid off.
It’s recent acquisition of Topo Chico’s US distribution rights, helped the brand grow its US retail value over 30% during the quarter.
Coca-Cola sales soar as the world remerges
Now that the hospitality world is opening up again, Coca-Cola has risen in the second quarter, as the non-alcoholic beverage of choice for those dining out.
Coca-Cola, casually known just as Coke, is a beverage which needs no introduction. Its signature shade of red identifies the product - sold in every country in the world, except for Cuba and North Korea. The company was founded in 1886 and remains headquartered in Georgia, USA, where the beverage has a revenue of $37b.
Coca-Cola’s revenue rises
Coke shares rose 2.3% on Wednesday morning in New York and the stock was up 1.8% this year.
The beverage giant believes that this is sure proof that consumers who were confined to their homes for months reduced their consumption of Coca-Cola while at home.
But now consumers are allowed to return to a level of normality, they are celebrating with their favourite chilled beverage - especially those who caught Coronavirus and suffered the loss of taste and smell.
Coca-Cola’s enduring popularity
The staff at Coca-Cola are thrilled, but not surprised, to discover that consumer tastes have not changed over the pandemic.
“Our results in the second quarter show how our business is rebounding faster than the overall economic recovery”, said James Quincey, Coca-Cola’s Chief Executive Officer. The company in particular cited a rebound in “away-from-home channels” as pandemic restrictions eased, sending sales above 2019 levels.
Coca-Cola also noted the unit case volume grew, covering:
- 17% in North America
- 21% in the Europe, Middle East and Africa region