ATLANTA — The Coca-Cola Co. has more than 200 reformulation initiatives under way to reduce added sugar across its carbonated soft drink portfolio, said James Quincey, president and chief operating officer. Additionally, the Atlanta-based beverage company is introducing more sugar-free options, such as Coca-Cola Zero Sugar, in several markets around the world.
|James Quincey, president and c.o.o. of Coca-Cola|
“More broadly, we have been taking multiple action to shape choice, to address changing consumer preferences around added sugar, while working proactively with governments to provide positive solutions,” Mr. Quincey said during an Oct. 26 earnings call with financial analysts. “In combination with this reformulation and innovation effort, we have also focused on small pack sizes, a great way to enjoy a drink with less calories. These packs can provide both a premium experience as well as being affordable, yet profitable way to bring people into the franchise…
“These actions and the results we are seeing give us confidence that we can further accelerate our sparkling business. So looking forward, we are working to grow by ensuring ongoing relevance and engagement with our existing brands while also expanding our brand portfolio so that we can meet consumer preferences.”
These efforts have helped Coca-Cola outpace a category that grew retail value by 3% year-to-date, Mr. Quincey said.
Net income attributable to shareowners of the Coca-Cola Co. in the third quarter ended Sept. 30 was $1,046 million, or 24c per diluted share, down 28% from $1,449 million, or 33c per diluted share, in the year-ago period. Net operating revenues decreased 7% to $10,633 million from $11,427 million. The decline included a foreign currency exchange headwind and impact from acquisitions, divestitures and structural items. Organic revenues grew 3% in the quarter.
|Muhtar Kent, chairman and c.e.o. of Coca-Cola|
“Our core business continued to perform well, delivering 4% organic revenue growth year-to-date, in line with our long-term target driven by our segmented revenue growth strategies, improving marketing and portfolio diversification,” said Muhtar Kent, chairman and chief executive officer of the Coca-Cola Co. “Within our core business, developed markets performed well, delivering solid revenue results with 2% unit case volume growth year-to-date and a continued focus on price realization.”
In addition to reducing sugar in its sparkling beverages, Coca-Cola is focused on expanding its non-carbonated offerings. Currently, the company’s still portfolio accounts for about 30% of volume and has been growing about a percentage point a year.
“If you look at our still portfolio today, it includes 14 of our 20 billion-dollar brands, with No. 1 or No. 2 positions in juice, coffee, water, tea and sports drink categories,” Mr. Quincey said. “Year to date, our system saw 5.8 billion incremental servings of our stills brands, capturing over 25% of the value growth in stills globally.”
In the United States, the company has extended the Smartwater brand into the sparkling water segment and revamped the packaging for Dasani Sparkling, resulting in retail value growth of more than 80% for these two products, Mr. Quincey said.
“We expanded the Honest Tea trademark into juice drinks, with Honest Kids becoming the No. 1 organic juice drink chosen for kids,” he said. “We see ready-to-drink coffee as an important growth category in the U.S. Today we are the global leader in ready-to-drink coffee category with strong positions in Japan and Korea. We are leveraging on this brand and launching Gold Peak ready-to-drink, cold brew coffee and Dunkin’ Donuts branded ready-to-drink coffee to begin capturing this opportunity in our flagship markets.”
For the full year, despite continued challenges in many emerging and developing markets, executives continue to expect 3% growth in organic revenues and 6% to 8% growth in comparable currency neutral income before taxes.“We continue our journey of transforming our company to a higher margin and higher return business, focused on building strong brands, enhancing customer value and leading a strong dedicated global franchise system,” Mr. Kent said.