Coca-Cola
Sees Progress to Recovery on Coffee Mix Beverages
April 21 - 2021
Coffee Geography Magazine
Coca Cola with Coffee and Coca-Cola with Coffee Zero Sugar, available in many markets
globally, were introduced recently in the United States. The products aim “to
give consumers a refreshing and reinvigorating reset to their daily routine,”
Coca-Cola said.
The
company said the United States became the 50th market globally to launch the
coffee product.
The
products had been expanding in Latin America and Europe. Despite the
innovation, unit case volume in North America fell 6% in the first quarter,
relative to a year earlier.
“This
was more than offset by continued coronavirus-related declines in the fountain
business, along with a decline in the hydration category primarily due to
cycling the consumer stocking in the prior year driven by coronavirus-related
uncertainty,” the company said.
Adjusted
operating income in the first quarter in North America (excluding currency
effects and other items affecting comparability) was up 24%, boosted by pricing
and “effective cost management,” Coca-Cola said.
Numerous
positive signs emerged at Coca-Cola Co. for the company’s business during the
first quarter of 2021, but “the path to recovery remains asynchronous around
the world,” the company said. Prospects at Coca-Cola for the balance of the
year will be highly reliant on progress in the battle against the coronavirus
pandemic and the associated ending of lockdowns, the company said.
“Global
unit case volume trends remain closely linked to consumer mobility, driven by
vaccination rates in different markets and related improvements in
away-from-home channels,” Coca-Cola said.
The
company said volume trends improved each month during the quarter, which ended
April 2.
“We
saw mid-single-digit volume declines through mid-February, trends have improved
since then,” James Robert B. Quincey, chairman and chief executive officer said
in an April 19 conference call with investment analysts. “We’re pleased to say
that March marked a return to volume levels seen in March of 2019 prior to the
pandemic.”
James Robert B. Quincey, chairman and chief executive officer
Still,
he cautioned recovery from the virus is anything but smooth sailing.
“The
breaking news today is the weekly new cases of COVID has hit an all-time peak,”
Mr. Quincey said. “So whilst vaccinations are rising in many countries, US, UK,
etcetera, the flip side is there’s actually a new high in terms of cases.
Obviously, a number of developing markets, but also Continental Europe as well.”
Where
infections rates are high, lockdown rates generally are high, too, weighing on
Coca-Cola’s away-from-home business, Mr. Quincey said.
“Conversely,
as markets start to open, It’s worth remembering it's not an on-off switch,” he
said. “There's a phasing of how markets tend to reopen. But that's true in the
US. So for example, in the US, the fountain volumes were still negative in
March because whilst people are going out to restaurants and there’s more
mobility, it’s not back to what it was. The occupancy levels of offices are
nowhere near 100%.”
Coca-Cola
net income in the first quarter was $2.26 billion, or 52¢ per share on the
common stock, down 19% from $2.8 billion, or 64¢ per share, in the first
quarter last year. Net sales were $9.02 billion, up 5% from $8.6 billion.