Coca-Cola’s global soda sales fall, first time in a decade
04/15/2014 2:56 PM
04/15/2014 5:46 PM
Coca-Cola sold more drinks in the first quarter, but it wasn’t because of soda.
The world’s biggest beverage maker said Tuesday that its global sales volume for soda fell for the first time in at least a decade. The drop was offset by stronger sales of noncarbonated drinks such as juice, and overall volume rose 2 percent.
A stronger dollar contributed to an 8 percent decline in profit for the quarter.
Gary Fayard, the company’s chief financial officer, attributed the decline in sodas partly to the timing of Easter, which falls in the second quarter this year instead of the first.
“It’s not as concerning to us as it would look at first pass,” he said in a phone interview.
He also noted that the soda results were hurt by results in Great Britain, where the company maintained pricing despite switching to smaller bottles. For the full year, Fayard said he expects global soda volume to be positive.
Coca-Cola Co. sells a wide variety of drinks, including Sprite, Minute Maid, Powerade and Dasani bottled water. But the quarterly decline in soda volume, nevertheless, underscores the pressures the company is facing around its flagship product, both at home and abroad.
Soda has been under fire in developed nations such as the United States for years over concerns that it fuels weight gain. More recently, executives have blamed even steeper declines among diet sodas to concerns about artificial sweeteners.
In North America, soda volume slipped 1 percent in the quarter. Soda volume also took a hit in Mexico as the country instituted a tax on the sugary drinks. Coca-Cola did not disclose the severity of the decline in Mexico, but Fayard said it was in the single-digits.
Coca-Cola gets a big portion of its business from overseas and from soda. Sales outside the U.S. account for 81 percent of Coca-Cola’s volume. Of that, sodas account for 75 percent of volume.
Coca-Cola isn’t alone in its struggles to boost soda sales. PepsiCo Inc., which reports its earnings Thursday, has seen even steeper declines despite stepped-up marketing, including sponsorship of the Super Bowl halftime show.
In the year ahead, Coca-Cola plans to slash costs and increase marketing spending by $400 million. The company also introduced a version of its namesake soda sweetened with a mix of stevia and sugar in Argentina, with plans to eventually introduce the drink elsewhere.
For the quarter ended March 28, Coca-Cola’s net income fell to $1.62 billion, or 36 cents per share. That compares with net income of $1.77 billion, or 39 cents per share, a year ago.
AP business writer Mae Anderson contributed.
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