Coca-Cola Co. raises full-year guidance on Q3 2023 results, focuses on digital investments
In the quarter ending Sept. 29, The Coca-Cola Co.'s net revenues grew 8% to $12bn, and its operating margin declined to 27.4% from 27.9% from the prior year. Earnings per share grew 9% to 71 cents and comparable EPS (non-GAAP) grew 7% to 74 cents
The Coca-Cola Co. also gained value share in total nonalcoholic ready-to-drink (NARTD) beverages, and unit case volume grew 2% for the quarter. Among the top-performing categories, sparkling soft drinks grew 2% for the quarter; juice, value-added dairy, and plant-based beverages grew 2%; and water, sports, coffee, and tea grew 1%.
The company expanded the availability of its 100% recycled PET plastic bottles, excluding the cap and label, to 11 major US markets — bringing it closer to its World Without Waste packaging goals, which include making 100% of its packaging recyclable by 2025 and using at least 50% recycled material in its packaging by 2030.
Additionally, Coca-Cola has made a number of sustainability improvements overseas. In Austria, the company launched a new refillable glass bottle and a paper wrap for its 1.5-liter multipacks.
“We delivered an overall solid quarter and are raising our full-year top-line and bottom-line guidance in light of our year-to-date performance. Our leading portfolio of brands, coupled with an aligned and motivated system, positions us to win in the marketplace today while also laying the groundwork for the long term,” James Quincey, chairman and CEO of The Coca-Cola Company, shared in a press release.
For the full year, Coca-Cola expects to achieve 10-11% organic revenue growth, compared to a previous forecast of 7-8%. With this, the company expects to deliver a comparable currency-neutral EPS (non-GAAP) growth of 13-14% and comparable EPS growth of 7-8%, compared to a 4-5% EPS growth projected initially for the year.
Coca-Cola Co. will double down on digital capabilities
Coca-Cola increased its marketing spend on digital media channels from 30% in 2019 as younger consumers watch less TV and spend more time on TikTok and other social media outlets, Quincey shared during an investor call.
“We're just scratching the surface of what's possible, [and] we're investing in digital capabilities now to expand our potential down the road," said Quincey.
As part of those digital capabilities, Coca-Cola Co. also invested in AI capabilities for product development, marketing, and logistics purposes. Last month, the company released its first AI-generated flavor of Coca-Cola, Y3000 Zero Sugar, and “the launch has demonstrated strong initial results,” Quincey said.
Recently, the company piloted texting consumers AI-generated personalized product recommendations, he said. Consumers who received the personalized recommendations were more likely to purchase the product, “resulting in incremental retail sales,” he added.
Similar to their international counterparts, US Coca-Cola bottlers also are digitally transforming and modernizing their technology, Quincey said. With AI, US bottlers can make suggested purchase orders to customers based on their needs, he added.
"We have been making investments in technology for a long period of time to drive efficiencies through the supply chain, through the manufacturing, through the logistics, whether it be old-school technology investments [or] AI," he explained.
Editor's note: To learn more about tech's role in the industry, make sure to check out the "From Fields to Fermentation: How AI and digital transformation are evolving the food and beverage industry" session at the FoodNavigator-USA Futureproofing the Food System virtual summit. Register to the event here and visit the website for more details.
