Olympic marketing boosts Coke volumes
Coca-Cola’s marketing to promote its sponsorship of the Olympics helped boost the number of products bought by consumers in its last financial quarter, but revenue was hit by promotional pricing across the sector.
The world’s largest soft drinks maker grew global volumes by 4 per cent year on year in the three months to 28 September, although net revenue grew just 1 per cent to $12.3bn (£7.6bn)– missing analysts’ estimates. Analysts had expected revenue of about $12.4bn (£7.7bn).
In Europe, volume grew 1 per cent in the period, while net revenue declined 8 per cent to £1.3bn (£806m), which it blamed on “unfavourable” low pricing and currency impacts.
Coca-Cola’s chief executive and chairman Muhtar Kent says it has grown volumes where others in the sector have struggled by consistently investing in its system and brands to ensure its portfolio is “more relevant and healthier” today than ever before.
He adds: “We remain resolutely focused on ensuring that we leverage our wonderful heritage and fuse it with what is expected by our consumers today in order to earn and sustain our place in their daily lives tomorrow.”
Coca-Cola says its brand health remains “consistently strong”, with continued improvements in “favourite brand scores” and growth among consumers who consume at least one of its beverages a week. It says these scores have been driven by its occasion-based brand, package, price and channel segmentation strategy.
It cites Fanta and Sprite as brands that have particularly benefited from this strategy in the quarter, which grew in volume 7 per cent and 4 per cent respectively, as it leveraged global marketing campaigns “in locally relevant ways”.
In Europe, profit declined 14 per cent in the quarter to $698m (£433m), reflecting investments related to the Olympics, traditional summer marketing activity and its marketing strategy to position Coca-Cola as a mealtime beverage. Globally, profit increased 1 per cent to £2.8bn (£1.7bn).