His comments came against the backdrop of CCE’s full year 2014 results – that revealed flat volume sales, with 6.5% growth in energy drinks, 5% growth in waters – led by Chaudfontaine and Smartwater in Great Britain – offsetting a 0.5% decline in sparkling soft drinks, where classic Coke sales down 0.5% contributed to a decline across the brand portfolio.
Last Thursday Coke’s anchor bottler in Western Europe posted net sales for FY 2015 of $8.264bn for the year to December 31, down 0.6% on a currency neutral basis versus FY 2013, while net income fell 0.6% to $663m.
CEO Brock blamed the company’s weak top line result on continuing macroeconomic weakness in Western Europe, shifting consumer preferences and tough competition.
Wider distribution for Coke Life, Finley and Glaceau Smartwater...
CCE will address the consumer preference issue by expanding distribution of Coca-Cola Life, Finley and springwater brand Glaceau Smartwater, he said, and introduce new packages and multipack combinations – namely ‘value building’ multipacks, ‘small basket’ PET packages and multipack cans.
The company will also strive to create a “close link between consumers and our brands”, Brock said, through consumer advertising and better marketplace execution to improve its in-store presence.
CCE launched adult soft drink Finley in France and Belgium in March 2014, and Brock said the company wants to extend distribution to new markets, while taking Smartwater beyond Great Britain and Sweden.
And after seeding Coke Life in Great Britain and Sweden last year, CCE has launched the stevia-sweetened mid-calorie cola (with 40% fewer calories than classic Coke) across its remaining territories in January – Belgium and Luxembourg, France, Holland and Norway.
“We’re expecting significant benefits in the entire year, because you think about it, we only started rolling these products out in August, September. So the first eight months or so we had none of these products or packages in the market last year,” Brock said.
The aspartame issue - CCE fights the 'detractors'
ASPARTAME GOOGLE HEAT MAP
The Google Trends data embedded above shows consumer interest in 'aspartame' as a search term from 2004 to the present day; the US leads the pack, followed by Canada, UK, Puerto Rico and Ireland. Although we should emphasize that consumers are not necessarily searching for bad news about the sweetener, the data at least indicates heightened interest in the sweetener in North America. Punch in the phrase 'aspartame dangers' and Canada heads the pack, followed by the US and UK.
Caroline Levy, beverage analyst at CLSA, asked Brock about “tremendous downward pressure” on Diet Coke (Coke Light in non-Anglo countries) in the US. ‘How had CCE avoided this slump?’ she asked.
“We have a very significantly increased presence in trying to protect our license to operate. Obviously there are people out there who are detractors who don’t fully understand or appreciate just how safe aspartame is,” Brock replied.
'We've worked closely with EFSA...That's helped our position'
“One of the things we’ve done is work very carefully with the European Food Safety organization [EFSA] and they’ve come out with a very clear definitive statement [a December 2013 scientific review that concluded aspartame and its breakdown products are safe] which is ‘Aspartame is Safe’. Full stop,” he added.
“And I think as a result that’s helped our position. We had a substantial issue around consumer concern in France a couple of years ago, and it’s less today than it was then," Brock said.
“And I think that’s generally true throughout most of our markets. But that is something we have to monitor and be aware of all the time.
“I’m not sure how you’d link it to the US – but we have had a continued, positive set of results around our diet soft drinks led by Coke Zero, of course, in all of markets. And we think we’ll continue to do so despite this bubbling level of concern around ingredients and particularly sweeteners.
“But net net we’re guardedly optimistic about the future and our ability to manage consumer perceptions in that area,” he added.