For the first quarter ended April 1, 2016, net revenue declined 4% to $10.28bn (compared to the same period in 2015) and its profit fell 5%, largely due to refranchising costs, the company reported last week.
Downsizing
Smaller packaging has gained traction worldwide, most recently in the US, as consumers become increasingly more conscious of portion size and sugar intake, according to the company.
“The US has moved very rapidly to the 12-ounce glass to the eight-ounce glass to the 7.5-ounce can, to the 8.5-ounce aluminum bottle. That has really worked,” Coca-Cola CEO Muhtar Kent said during an earnings call.
Still-beverage competes with sodas
As consumers move away from sodas due to health concerns, Coca-Cola’s still-beverage portfolio is growing.
“Of the twenty billion-dollar brands we have now, 14 of them are still brands, and our still business is performing well,” Kent said.
The company’s reported total sales volume rose 2% in the first quarter of 2016 compared to the same period last year, helped by the performance of non-carbonated drinks like bottled water, sports drinks, and ready-to-drink tea products.
Still beverage volume growth in the quarter was driven by double-digit growth in packaged water, 7% growth in sports drinks and 2% growth in ready-to-drink tea, partially offset by a 1% decline in juice and juice drinks, Coca-Cola reported.
“Whether it's in developed markets or emerging or developing, our still beverage portfolio is being enhanced all the time,” Kent added.
Water and premium waters are “performing very well” worldwide, according to Kent.
One-brand strategy
Meanwhile, the company is promoting its flagship Coca-Cola drink by uniting several of its trademark soda products under a single brand appearance, using its familiar red disc logo on bottles and cans (available first in Mexico at the beginning of May), the company said.
The move is intended to give the drinks a more impactful presence on store shelves, while maximizing advertising dollars, Coca-Cola president and COO James Quincey said.
“We execute in stores all the variants of Coca-Cola together as one big block; it has a much greater store impact, visual impact, engagement with people who are shopping the stores,” Quincey said during the call.