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That Sinking Feeling: Coca-Cola Aims to Get More Entrepreneurial to Spark Sales

Posted by Dale Buss on October 21, 2014 04:59 PM

If only Coca-Cola could find a way to extend its "Share a Coke" program for a long time to come. Besides that short-term spark to soda sales, the company didn't have much good news to share—or optimism for the future—along with its quarterly earnings report today.

The beverage giant's revenue actually declined during the third quarter, to less than $12 billion. Its profit fell 14 percent as global soda volume remained flat, reflecting the long-term struggle faced by Coca-Cola and its soft-drink rivals in a pronounced lack of interest in their primary products by more and more health-conscious consumers.

CEO Muhtar Kent also noted that the company is struggling, along with other beverage and consumer packaged goods companies, with currency headwinds and deterioriating economic conditions not only in emerging markets but also in Europe. "This is placing strong pressure on the short-term performance of our business," he said on the company's earnings conference call. He also lowered short- and long-term financial expectations.

But Coca-Cola must keep paddling, so Kent announced a series of initiatives both of the belt-tightening and innovation variety designed to spur growth—somehow. Continue reading...

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Big Soda Shrinks Calories, Pushes Personal Responsibility

Posted by Dale Buss on September 24, 2014 05:13 PM

Soda marketers have been fighting gradual declines in US soft drink consumption for several years now. But with the imprimatur of the Clinton Global Initiative, which is meeting this week in New York in tandem with the UN General Assembly, the big three soda-makers behind the American Beverage Association (ABA) have decided to wrap a calorie-reduction PR campaign and associated pledges around this seemingly inexorable trend.

Under the auspices of the organization founded by former President Bill Clinton, Coca-Cola, PepsiCo and Dr Pepper Snapple Group this week pledged to reduce beverage calories consumed per person by 20 percent nationally by 2025. Such calorie consumption already has dropped by about 12.4 percent between 2000 and last year, and 23 percent for carbonated drinks alone, estimated Beverage Digest.

In a collective statement issued by the ABA, top industry leaders gathered at the CGI meeting and pledged "engage in consumer education and outreach efforts to increase consumer awareness of and interest in the wide array of no- and lower-calorie beverages and smaller portion sizes available."

Under the banner of the Balanced Calories Initiative, the beverage industry leaders will put special emphasis on promoting reduced-calorie beverages in highly-trafficked sections of stores, such as checkout areas, and in communities (such as the president's birthplace of Little Rock, Ark., and the greater Los Angeles area) where purchases of low- and no-calorie soda drinks track behind the national average.Continue reading...

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Critics Make a Dent in Coke's Can as Brand Steps Up Health Marketing

Posted by Dale Buss on July 31, 2014 04:04 PM

Things aren't going well for Coca-Cola these days. While the company still returned $47 billion in profits last year, that amount was down by more than $1 billion from 2012.

That may not seem like much of a problem, but as newly chronicled in places ranging from the cover of the new issue of Bloomberg Businessweek to a prominent story in this morning’s Wall Street Journal, minting profits—and sales—for Coca-Cola no longer is as simple as filling another bottle or can. The company and, especially, the brand are being hit with unprecedented resistance these days that is so stiff, some worry it ultimately could be existential for Coca-Cola.

Consumption of soda globally fell in the first quarter for the first time since 1999, though they rebounded in the second quarter; and the consumption slide continues in the US as the brand remains under assault from anti-obesity activists and politicians for its sugar and calorie content, while Diet Coke increasingly is suffering attrition as well because of concerns about aspartame. Meanwhile, new beverage startups in the flavored water and tea categories in which Coke has invested aren’t growing quickly enough to offset the continued losses in soda consumption.Continue reading...

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CPG Brands Whack Calories, But Some Critics Won't Give Them Their Due

Posted by Dale Buss on January 9, 2014 02:58 PM

Apparently you're damned if you do, and you're damned if you don't—at least if you're a consumer packaged goods company. That's one of the big lessons of the reaction to this week's announcement that CPG companies have more than quadrupled the goal in their pledge to reduce the total calories contained in their products over the last five years.

Critics quickly wondered whether the companies should be getting credit, or just American consumers who've been making "better" eating choices. But more on that later.

The total calories in products sold by 16 of the nation's largest food and beverage companies—ranging from Coca-Cola to PepsiCo, General Miils to Kellogg, Kraft to Nestle —dropped by 6.4 trillion from 2007 through 2012, according to an independent evaluation funded by the Robert Wood Johnson Foundation.Continue reading...

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Sliding Coca-Cola Sales Apparently Cost Job of Coke's Americas Chief

Posted by Dale Buss on December 13, 2013 03:49 PM

Steve Cahillane has been sidelined in the horserace to succeed Coca-Cola CEO Muhtar Kent, with the president of Coca-Cola Americas leaving the company as Coke restructures management yet again. It appears that slowing soda sales in the US nixed Cahillane's chances for the company's top job.

It was just a year ago that Coke streamlined its management to set up an apparent contest between Cahillane and the new head of the rest of the world, Ahmet Bozer, to succeed Kent someday; he's been CEO since 2008. Bozer now has been installed as a clear No. 2 to Kent, according to the Wall Street Journal.

In its moves this week, Coke also said that it would divide North American duties into a job overseeing corporate North American operations that will be occupied by Sandy Douglas, who will also continue as global chief customer officer, and a North American bottling portion that will be overseen by Paul Mulligan, who had been in charge of bottling investments in Japan and Latin America.Continue reading...

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As Its Woes Pile Up, It's Worth Asking: Has McDonald's Jumped the Shark?

Posted by Dale Buss on October 17, 2013 01:58 PM

Is it possible that McDonald's finally has jumped the shark? Its faltering performance has put the iconic chain in the crosshairs of securities analysts and investors lately, and even some of its own franchisees, as well as the predictable coterie of nutrition critics and low-wage-worker advocates.

"I think McDonald's has reached its apex,"said a franchisee in a new Janney Capital Markets survey of 29 McDonald's franchisees. Is he right?

Clearly the world's leading fast-feeder has been struggling for a couple of years under the leadership of CEO Don Thompson, who succeeded a very good run by the initially underestimated former CEO Jim Skinner. Same-store sales in the US and some other markets are barely staying above year-ago comparisons. And while new menu items proliferate, most of them have been for only a "limited time—such as the new Southwest Chicken Premium McWrap—and they tend to slow service.Continue reading...

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Coca-Cola CEO Muhtar Kent Steers Ship Through Positive Third Quarter

Posted by Dale Buss on October 16, 2013 10:53 AM

Buffeted by what CEO Muhtar Kent called "headwinds" and aided by "tailwinds" around the world, Coca-Cola reported a good but not great third quarter and vowed once again to meet its target of doubling 2010 revenues by 2020.

Meanwhile, PepsiCo today reported a 1.5 percent revenue increase for the period while US beverage sales slid by 2 percent.

While much of the attention to the Coke brand these days is how marketers wrangle with the obesity issue, sales of the globe's leading soft-drink brand still grew 2 percent by volume during the period. About 70 percent of the company's sales are soft drinks.

Overall sales volumes including non-soda drinks such as teas and bottled waters grew by 2 percent in the United States. But it was emerging economies that gave Coca-Cola enough momentum to post a 4 percent rise in earnings per share for the period, in line with analysts' expectations.Continue reading...

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Sprite Hopes to Spread Holiday Cheer with Limited-Time Cranberry Flavor

Posted by Alicia Ciccone on October 10, 2013 07:42 PM

Sprite is hoping to sweeten up the holidays with a new limited-time, cranberry-flavored version of the popular lemon-lime soft drink. 

In its first flavor innovation since it debuted Sprite Remix in 2005, the new flavor will contribute a kick of sweet and tart cranberry in regular and Sprite Zero forms. Available from mid-October through the New Year, the new beverage might lend itself well to holiday-themed drinks and even as a flavored mixer for alcoholic concoctions. 

The innovation comes as major soft-drink manufacturers Coca-Cola and Pepsi are feeling the squeeze of more health-conscious customers, with soda consumption volumes falling. Coke has tried to quell calorie concerns with widespread anti-obesity campaigns and the expansion of its "Zero" calorie-free line to more of its brands.Continue reading...

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