Coca-Cola Enterprises admits lost GB market share

Speaking at Barclay’s Back-to-School conference in Boston yesterday, CEO John Brock noted that CCE posted net sales of $8.3bn in 2011, with the non-alcoholic ready-to-drink (NARTD) category representing $25bn in retail sales across all its territories.

The firm held a 20% NARTD volume share and a 29% value share across all territories, he said, adding that CCE had successfully leveraged the London Olympics to boost brand equity and customer relationships across its territories.

Clawing back share...​

But Brock admitted the firm had suffered due to “greater than ideal”​ promotional activity in H1 2012 (the year to June 29) and thus lost ‘modest’ volume and value share in Great Britain, while Q2 was unduly wet and cold in that territory and across Europe.

Glossing Britvic and AG Barr’s attempts to agree a merger this week, Shore Capital analyst Phil Carroll noted that Pepsi licensee Britvic had won market share during Coca-Cola’s Olympic sponsorship.

But Brock added: “I’m pleased to report that in the third quarter of the last eight weeks or so, the promotional activity has been far more rational – perhaps that has to do with the Olympics – and we gained back our volume and value share.”​

French soda tax effects​

CCE remained “guardedly optimistic”​ in Great Britain for the balance of the year, Brock added, while in France the firm was surprised that some retailers had not attempted to pass through the cost of profits lost as a result of the French excise tax on soft drinks, implemented from January 1.

“Retailers have used it in differing ways and have passed it through in different speeds, and even as we said here in early September…it still hasn’t been passed all the way through by all retailers," ​Brock said.

“So I think we will have some challenging, maybe more challenging than normal discussions with our retailers as we talk about pricing in 2013, because they’ve undergone…some margin compression,"​ he added.

Turning to the future of NARTDs across CCE’s territories, Brock said: “Even with its size, the NARTD category offers significant future growth as well, since it remains expandable. [T]he total NARTD category in our territory today is substantially less developed in the same category in the US.”​

This was due to high European tea and coffee consumption (around double that of the US), he added, which meant that the European sparkling segment was “relatively undeveloped”​, with per capita consumption only around half that of the US.