Coke Kicks Off World Cup Campaign - Analyst Blog

The Coca-Cola Company's KO FIFA World Cup marketing program kicked off recently — another of the cola giant's strong integrated marketing campaigns to boost sales.

The campaign includes a television and digital film, a series of documentary-style short films, a campaign to launch the official World Cup anthem, creation of The Happiness Flag — a large photo mosaic — and a trophy tour across 90 countries from September this year.

Coca Cola has been associated with FIFA since 1974 and has sponsored the World Cup since 1978.

The FIFA World Cup marketing campaign is part of Coca-Cola'splan to invest $400 million in media in 2014 to reinvigorate its sparkling brands like Coke, Fanta and Sprite that are suffering due to challenges in the carbonated soft drinks CSD category. Apart from the FIFA World Cup, the spending will be diverted to the Olympics as well as the Share a Coke campaign.

The CSD category has now declined for the ninth straight year in 2013 due to growing health and wellness consciousness -- consumers are particularly vigilant about the use of artificial sweeteners, high sugar content and related obesity concerns. Among CSDs the cola segment has particularly come under fire as consumers look for alternative beverage offerings. Also possible new taxes on sugar-sweetened beverages and growing regulatory pressures are affecting CSD sales. The challenges in the CSD category have been felt by all major soft drink makers — Coca-Cola, PepsiCo, Inc. PEP and Dr Pepper Snapple Group, Inc. DPS – with lower volumes and weakening sales.

Though Coca-Cola's 2013 revenues and profits fell short of its expectations mainly due to sparkling beverage challenges, management aims to accelerate growth in 2014 — the "year of execution". It expects to resume growth in the year through aggressive investments across marketing, innovation, product development, infrastructure, distribution and overall improved execution.

In 2014, the company plans to accelerate growth of sparkling beverages (led by Coca-Cola), expand its still beverage portfolio and increase its brand building investments.

Coca Cola carries a Zacks Rank #4 (Sell). A better-ranked stock in the beverage industry is energy drink maker Monster Beverage Corporation MNST as energy drinks have been done better in 2013 than the fizzy soft drinks. Monster Beverage carries a Zacks Rank #2 (Buy).