Coca-Cola: ‘Most growth dollars in beverages are still going to come from sparkling.’

By Mary Ellen Shoup contact

- Last updated on GMT

Coca-Cola's smaller packaging formats, especially its mini cans, have experienced strong sales growth, the company said.
Coca-Cola's smaller packaging formats, especially its mini cans, have experienced strong sales growth, the company said.
Despite declining soda consumption and sugar sweetened beverage taxes going into effect across the US, Coca-Cola saw its soda revenue rise 4% in 2016 thanks to smaller packaging.

While carbonated soft drinks volume is declining, the company’s core sparkling brands like Coke, Sprite, and Fanta are growing in dollar sales thanks to a focus on smaller, more convenient and on-trend packages, Coca-Cola said.

“If you analyze in the North America market or the global market, one, three, five years out, the most growth dollars in beverages are still going to come from sparkling,”​ Coca-Cola North America president, Sandy Douglas, told Barclay’s Capital in an interview on Coca-Cola's news site.

Small packs, big growth

Smaller pack sizes of Coca-Cola’s sparkling portfolio including its mini cans (introduced in 2007) have increased in retail sales value from 10% to 15% over the past six years, according to Nielsen data reported by Coca-Cola.

Conversely, Coca-Cola's larger packaging including its 2-liter bottles have fallen from 60% of Coke’s retail value in 2011 to 50% in 2016.

“As long as the consumer wants things that are different than what we have, we can get there if we're good at moving at the speed of the consume​r,” Douglas said.

Another area of growth for the company's soda brands is the positive reception of the new Coke Zero Sugar​, according to the Coca-Cola.

“Since the launch, the brand's growth has accelerated,”​ he said. “And based on our experience in the UK and the early results here (US), it'll take Coke Zero Sugar to a new level and we're looking forward to that.”

Brick-and-mortar not to be ignored

E-commerce has proved successful for Coca-Cola beverages sales, according to Douglas, as online ordering has grown the business across multiple channels including at-home consumption and food service.

“Our incidence of beverage attachment, if we're well merchandised on a digital app, is 50% higher on pizza orders than on telephone orders,”​ he said.

“Whether it's the experience, the order, the in-home out-of-stock or click-and-collect... all of it adds up to being another big merchandising opportunity and a chance for us to sell more beverages.”

However, brick-and-mortar retail will remain a key area of focus for Coca-Cola, Douglas added.

“Don't count out the brick retailers,”​ he said. “They're moving fast. They have significant assets, and they're working to serve the shopper.”

E-commerce can also play a hand in driving in-store retail purchases as many consumers still want the brick-and-mortar shopping experience, Douglas said.

“Don't think of e-commerce as a channel,”​ he said. “It's a way for consumers to research, to buy, to experience brands and then, ultimately, to have them have fulfilled.”

“The clicks are looking for bricks, and the bricks are looking for clicks.”

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