The Coca-Cola Co., Atlanta, reported strong operating results in the second quarter of 2019, driven by consumer-centric innovation, solid core brand performance and improved execution in the marketplace, it says.
Reported net revenues and organic revenues (non-GAAP) for the quarter both grew 6 percent through balanced volume and price/mix, with all operating segments contributing to organic revenue (non-GAAP) growth. Net revenue for the quarter totaled $10 billion. The company continued to gain global value share and its performance year-to-date led to an update in full year guidance.
“Our strategy to transform as a total beverage company has allowed us to continue to win in a growing and vibrant industry,” said James Quincey, chairman and CEO of The Coca-Cola Co., in a statement. “Our progress is positioning the company to create more value for all of our stakeholders, including our shareowners.”
Strong performance for the quarter was driven by sparkling soft drinks, led by 4 percent volume and transaction growth in trademark Coca-Cola. Coca-Cola Zero Sugar continues to perform well, with a seventh consecutive quarter of double-digit volume growth globally. Quarterly performance was further driven by innovation, such as Coca-Cola Plus Coffee, and a modernized marketing strategy for today's consumers. The company reached a first-of-its-kind partnership with Netflix to temporarily bring back 1985’s New Coke for the July 4 debut of season 3 of the series "Stranger Things."
During the quarter, the company launched the first-ever Costa Coffee ready-to-drink (RTD) chilled product in Great Britain, marking the first major introduction since Coca-Cola acquired Costa earlier this year. The company plans to roll out the product in additional markets in the second half of the year. The brand delivers an authentic coffee taste experience with 30 percent less sugar than most RTD coffees in Costa’s core market of Great Britain, it says. The Costa Coffee brand also is expanding through a new agreement with Coca-Cola HBC AG. The agreement will address a broad range of consumer and customer needs across multiple channels and occasions, including roast and ground coffee, RTD offerings and vending. The bottler plans to introduce Costa Coffee in at least 10 markets in 2020.
The first energy drink under the Coca-Cola brand launched in select European countries during the quarter. Coca-Cola Energy features caffeine from naturally derived sources, guarana extracts, B vitamins and no taurine, all with the great Coca-Cola taste and feeling that people know and love. The product has shown early signs of success. Coca-Cola Energy now is available in 14 countries, including recent launches in Japan, Australia and South Africa. The company expects to offer Coca-Cola Energy in 20 markets by the end of 2019, including Mexico and Brazil.
In North America, price/mix grew 4 percent for the quarter, driven by sparkling soft drinks. Unit case volume declined 1 percent partially due to the impact of pricing and package initiatives executed in the marketplace, which is driving positive price/mix performance. Positive performance in trademark Coca-Cola was driven by double-digit growth in Coca-Cola Zero Sugar and innovations such as Coca-Cola Orange Vanilla.