Coca-Cola recently reported a boost in its sales, thanks in part to its premium drinks and mini cans, even as demand remains lukewarm in the U.S. and other markets. The company observed a split in consumer behavior: higher-income buyers are choosing pricier brands like Smartwater and Topo Chico, while middle and lower-income consumers feel squeezed.
Henrique Braun, Coca-Cola’s COO, highlighted the company’s move to make products more affordable by introducing smaller packaging. Starting January 1, North American convenience stores will offer 7.5-ounce mini cans for $1.29 each.
The company’s organic revenue grew by 6% to $12.41 billion in the third quarter, aligning with analyst expectations. Globally, unit case volumes showed a 1% increase, reversing a decline from the previous quarter. While North America and Latin America saw flat volumes, Europe, the Middle East, and Africa experienced a 4% rise.
Coca-Cola Zero Sugar emerged as a favorite, reporting a 14% increase in sales. Other beverages, including water and sports drinks, also performed well, though dairy and juice saw a drop of 3%. The company’s net income rose by 30% to $3.69 billion, exceeding analyst forecasts of 78 cents per share with an adjusted earnings of 82 cents.
Coca-Cola continues to expect organic revenue growth of 5% to 6% for the year. The company is also moving forward with plan to refranchise its bottling operations in Africa, selling a controlling interest in Coca-Cola Beverages Africa for $2.55 billion while retaining a 25% stake. This change aims to allow Coca-Cola to focus more on branding and innovation.
James Quincey, the CEO, stated that this strategy will aid in overall growth and profitability, spotlighting a similar shift that took place in India earlier. Meanwhile, competitor PepsiCo is facing pressure from activist investors to consider a similar refranchising approach in North America.
The beverage industry is adapting to fluctuating consumer preferences, and Coca-Cola’s recent strategies reflect an effort to stay ahead in a challenging market. As consumers seek more variety and healthier options, companies will need to adjust their offerings accordingly.
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The Coca-Cola Co., James Quincey, North America, Europe, Africa, GA State Wire, Georgia, Business, Henrique Braun, PepsiCo, Inc., Financial markets
