Coca-Cola finds opportunity in slow times for soda
- Coca-Cola reports that its soda revenue — made up of sales from Coke, Sprite and Fanta brands — was up 4% in 2016 due in part to smaller-sized packaging and a successful online ordering program, according to Beverage Daily. The company’s new Coke Zero Sugar has also been well received.
- Nielsen data shows that retail sales value of small pack sizes, including the mini cans that Coke introduced in 2007, have increased from 10% to 15% in the past six years. In contrast, the company’s carbonated sodas sold in bigger packaging, like its 2-liter bottles, have dropped from 60% of Coke’s retail value in 2011 to 50% in 2016.
- Coca-Cola North America President Sandy Douglas, speaking at Barclays Global Consumer Staples Conference earlier this month, said the company’s business is doing well across all channels, indicating that online ordering has helped the company grow its at-home consumption as well as foodservice business. “Whether it’s the experience, the order, the in-home out-of-stock or click-and-collect, all of it adds up to being another big merchandising opportunity and a chance for us to sell more beverages,” Douglas said.
Shoppers have been rejecting soda and other sugary drinks in favor of healthier alternatives in recent years. In 2016, bottled water surpassed carbonated soft drinks to become the largest beverage category by volume in the U.S., according to the Beverage Marketing Corporation. State soda taxes taking effect in certain parts of the country have impacted big beverage companies, too.
Soda companies are finding some growth pockets, though.
“As long as the consumer wants things that are different than what we have, we can get there if we’re good at moving at the speed of the consumer,” Douglas said at the Barclays Global Consumer Staples Conference
Beverage companies are introducing more low-calorie drinks, too, including those that incorporate stevia, monk fruit and other alternative sweeteners. Coca-Cola, Dr Pepper Snapple and PepsiCo have all made a commitment to reduce the number of sugary drink calories that Americans consume by 20% before 2025. Last month, Coca-Cola started replacing Coke Zero with Coca-Cola Zero Sugar.
Online ordering has also opened up new opportunities for beverage companies. Coca-Cola has cited growth in its foodservice and at-home consumption related to digital activities, including mobile app ordering and click-and-collect services. According to Douglas, the company has seen 50% more people adding a beverage to pizza orders placed using a mobile app versus a telephone order.
Clearly, some niche merchandising and marketing opportunities remain for the big soda brands. It just may be a matter of looking in different places — like foodservice mobile apps and retail click-and-collect, for example — and offering different packaging and varieties to suit shifting consumer demands.
- Beverage Daily Coca-Cola: ‘Most growth dollars in beverages are still going to come from sparkling.’
- The Coca-Cola Company Transcript: Barclays Global Consumer Staples Conference
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