Coca-Cola Co.’s third quarter quarter revenue and profit topped Wall Street expectations on Tuesday, as investments to cater to changing consumer tastes paid off with higher sales of its sugar-free sodas and vitamin waters.
Aishwarya Venugopal of Reuters had the news:
Organic revenue, or sales from its core beverage business, rose 6 percent in the third quarter, led by double-digit volume growth for Diet Coke and Coca-Cola Zero Sugar.
Volumes, a key indicator of demand, grew 2 percent in the quarter, roughly stable from a year ago. Carbonated drinks grew 2 percent in the quarter, while water and sports drinks, up just 1 percent in the previous quarter, grew 5 percent.
“(We are) starting to see growth coming back into water as we’ve done a bit of de-prioritizing and moved more into premium and innovation,” Quincey said.
Earlier this year the company launched new slim line Diet Coke cans along with flavors including ginger lime and feisty cherry. It promised earlier this month to introduce two new variants of its smartwater brand on the U.S. West coast.
Christopher Doering of Food Dive reported that Coke benefitted from healthier drinks:
Coca-Cola has focused much of its efforts in recent years on bulking-up its presence in better-for-you drinks like tea, water and coffee without losing focus on its still popular core soda business. The third quarter provided the latest evidence that its bid to evolve into a total beverage company is paying off.
Coca-Cola posted strong results in Diet Coke, Coke Zero Sugar and sparkling water, and in teas like Fuze and Gold Peak. Soda sales increased 2%. The Atlanta company continues to post strong results by overhauling brands that have fallen out of favor, like Diet Coke. The company relaunched the brand in January with a taller, slimmer can and four new flavors, and consumer interest in the new product suite appears to be holding strong.
“Overall, KO reported another strong quarter, with robust organic sales growth of +6%,” Bonnie Herzog, an analyst for Wells Fargo Securities, said in a note to clients. “We are impressed with KO’s ability to deliver a strong and balanced topline, suggesting that its refranchising and portfolio transformation are paying off.”
Thomas Barrabi of Fox Business reported that CEO James Quincy downplayed its interest in a cannabis drink:
Coca-Cola CEO James Quincey on Tuesday dismissed rumors that the beverage giant is mulling an entrance into the legal cannabis industry, even as other beverage brands have explored cannabidiol (CBD)-infused drinks.
“We don’t have any plans at this stage to get into the space,” Quincey told analysts during an earnings call. “So that’s kind of where we are.”
Demand for products containing CBD, a non-psychoactive compound in marijuana, has grown in recent years amid pushes in various jurisdictions to legalize pot. CBD product sales are expected to surpass $1 billion in 2018, according to the Hemp Business Journal.
Bloomberg reported last September that Coca-Cola was in talks with Aurora Cannabis, a Canada-based marijuana company, to develop a CBD-infused beverage. At the time, Coca-Cola said it was “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverage around the world,” but said “no decisions” were made on whether to partner with Aurora.
