Coca-Cola CEO: ‘2018 is shaping up to be stronger than 2017’
Organic sales of Coca-Cola’s non-carbonated portfolio of water, tea, and coffee rose 6% for Q417 while its carbonated soft drinks sales remained stagnant.
“We entered the fast-growing US ready-to-drink coffee category, capturing over seven points of value share by the end of the year,” Coca-Cola president and CEO James Quincey said during the company’s Q417 earnings call.
“We lifted and shifted two of our leading US brands, Honest and smartwater, into multiple international markets and acquired AdeS, the leading plant-based beverage brand in Latin America with the intension of expanding it into Europe in the near future.”
For the full 2017 fiscal year, Coca-Cola reported net sales of $35.4bn, a 15% drop from the previous year mainly due to a $3.6bn charge related to new tax law in the US.
“Over the next eight years, the lower effective tax rate will mostly be offset by the annual payment on the tax charge we took during the fourth quarter,” Quincey said.
“[US] Tax reform will make investing in the US more attractive and should spur economic growth. We are currently evaluating it and expect our system to accelerate investments to capture further opportunities.”
The company is targeting 4% organic growth for 2018 driven by the “strong rollout” of brands such as Coca-Cola Zero Sugar, FUZE Tea, AdeS plant-based beverages and smartwater, Quincey added.
“Looking ahead, 2018 is shaping up to be stronger than 2017. We are well positioned to accelerate our top-line performance based on the actions we've taken.”
Turning around Diet Coke
Coca-Cola’s image overhaul of the Diet Coke, which includes new packaging and flavors, was unveiled earlier this year to “turn around” the brand after continued sales volume declines. Diet Coke’s decreased sales became more pronounced after the relaunch of Coke Zero Sugar last year with new packaging design and flavor reformulation that has grown sales by 10% for the year.
“I think we are going to have hopefully a better year in 2018 in terms of Diet Coke,” he said.
“We had a strong start at the beginning of this year with the launch of new program. Clearly, we would love to at least stop declining, if not get into growth. I'm not sure just the flavors and the packages will get us there, but it's certainly going to be a good step in the right direction.”
Addressing plastic waste
Coca-Cola sustainability goals have become increasingly important to company, according to Quincey, who said it is aiming to collect and recycle 100% of all its bottles and cans sold by 2030 along with making all of its packaging 100% recyclable.
“In a world where packaging waste, especially plastic waste, is a growing problem, we are working to make sure that no bottle is ever a single-use bottle,” Quincey said.
“Through recycling, it'll have more than one life.”
