Coca-Cola puts faith in new products after poor half year performance in Australia
Coca Cola Amatil will be hoping that its Coca-Cola No Sugar and Keri Juice Blenders, launched in June, help raise the company’s performance in Australia after it recorded a 29.3% H1 profit drop.
Whilst earnings improved in New Zealand, Fiji, Indonesia and Papua New Guinea, this wasn’t enough to offset the significant dip in Australia, with profits down to $140.1mn, having been $198.2mn over the same period last year.
The drop in the company’s Australian beverages division is reportedly down to increasing competition and discounting that has hurt revenues.
However, Managing Director Alison Watkins has expressed that whilst hurdles still need to be overcome, significant improvements have been made since Easter, largely down to the launch of these new products.
"We did get off to a difficult start to the year and we have seen, I would say, a steady improvement since then and a return to more normal conditions.
"A couple of very significant new product launches are really helping our momentum for the second half."
The company remains confident that it will still achieve a surplus in line with 2016’s annual profit of $418mn, something that will require a 4% growth in its Australian sector for the remainder of the year.
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