The Coca-Cola Co. reports Q2, YTD 2013 results
North America market reports growth in sparkling, still beverages, juice drinks
The Coca-Cola Co., Atlanta, reported its second quarter and year-to-date 2013 results. Globally, the company reported volume growth of 1 percent in the second quarter and 3 percent year-to-date as well as global volume and value share growth in total non-alcohol ready-to-drink (NARTD) beverages as well as in both sparkling and still beverages. Volume growth in the quarter was below the company's expectations due to a confluence of factors that collectively made for a challenging second quarter, it says. Slow economies in Europe, Asia and Latin America, and historically wet and cold weather conditions across multiple regions impacted consumer spending and, consequently, overall NARTD beverage industry performance, it says.
Coca-Cola Americas grew volume by 1 percent in the quarter and 2 percent year-to-date, with North America volume down 1 percent, because of unseasonably cold and wet weather and the timing of the Easter and July 4th holiday periods as well as weakened consumer spending that affected the overall NARTD beverage industry in the region, it says. Latin America volume was up 2 percent in the quarter, it adds.
Worldwide sparkling beverage volume was even in the quarter and up 2 percent year-to-date, it reports. Despite unseasonably cold and wet weather and continued volatile macroeconomic conditions in many markets around the world, the company grew global volume and value share in sparkling beverages in the quarter, led by marketing campaigns such as “Share a Coke” in Europe and “Coca-Cola Open Summer” in North America, it notes. Worldwide, brand Coca-Cola volume grew 1 percent in the quarter and 2 percent year to date, with growth in the quarter across diverse markets, including Thailand, India, Nigeria, Russia, Argentina and the Philippines.
Worldwide still beverage volume grew 6 percent in both the quarter and year-to-date, with solid volume and value share growth across beverage categories including packaged water, juices and juice drinks, and ready-to-drink tea. Excluding the impact of acquired volume, primarily the Aujan partnership in the Eurasia and Africa Group, still beverage volume grew 4 percent in the quarter. More specifically, ready-to-drink tea volume grew 10 percent in the quarter, with continued strong performance of key brands such as Gold Peak and Honest Tea in North America, Ayataka green tea in Japan, and Fuze Tea across multiple markets worldwide, it reports. Packaged water volume grew 6 percent in the quarter as the company continued to focus on innovative and sustainable packaging as well as immediate consumption occasions to help drive value share growth ahead of volume share growth, it says. Energy drinks volume grew 5 percent in the quarter driven by growth across the company’s energy brand portfolio. Juices and juice drinks volume grew 4 percent in the quarter, showing growth across all geographic operating groups.
Specifically in North America, the company maintained volume share and grew value share in total NARTD beverages in the quarter as it continued to focus on building strong brands, creating value with customers, and enhancing system capabilities. In addition, the company gained volume and value share in both sparkling and still beverages, with volume and value share gains across every still beverage category except sports drinks, it says. Sparkling beverage volume declined 4 percent in the quarter with sparkling beverage price/mix growth of 1 percent and value share growing ahead of volume share as the company remained committed to a rational pricing environment, it explains. Still beverage volume grew 5 percent in the quarter, led by strong performance across both the ready-to-drink tea and packaged water categories with brands such as Gold Peak, smartwater and Dasani leading the pack. Further, volume and value share gains in the juices and juice drinks category were driven by 4 percent volume growth for Simply and 3 percent growth for Minute Maid, it adds.
“Our second quarter volume results came in below our expectations, reflecting an ongoing challenging global macroeconomic environment and unusually poor weather conditions in the quarter,” said Chairman and Chief Executive Officer Muhtar Kent in a statement. “While we are not happy with our performance, we did gain global volume and value share in total nonalcoholic ready-to-drink beverages as well as in sparkling and still beverages in the quarter. Despite the headwinds in the quarter, we are committed to improving upon our results, with current dynamics leading us to believe that our performance will be better in the second half of the year. We remain confident in our 2020 Vision and our system's ability to execute with precision around the world. In this context, we remain firmly focused on investing alongside our global bottling partners to strengthen our system for the future, to deliver the brands and beverages that consumers love and to achieve our long-term performance goals.”