Coca-Cola Reports Decline In Carbonated Beverage Sales
Coca-Cola (NYSE: KO) released its full-year and fourth quarter sales Tuesday. In the report, the company disclosed that global volume had increased, but profits fell short for carbonated beverage sales in North America.
Coca-Cola reported that sales volume declined one percent in North America for the fourth quarter. The company said that its sports drink, Powerade, delivered single-digit growth, but carbonated drink sales declined three percent.
Coca-Cola's carbonated beverages are suffering because of changing consumer preferences toward low-calorie drinks, according to a report from Zacks Investment Research.
“Accordingly, Coca-Cola is trying to re-invigorate sales of its soft drinks by conducting strong integrated marketing campaigns, offering more choices to customers in package sizes, sweeteners and beverages (including more low- and no-calorie selections) and providing transparency in labeling,” the report said.
Global volume growth was below the company's expectations. Coca-Cola reported growth in carbonated beverage sales in foreign markets, including Asia and Latin America. The Zacks report says 43 percent of the company's business is in developed markets, 37 percent in developing nations and 20 percent in emerging markets.
Morningstar's Thomas Mullarkey said in an analyst note that Coca-Cola management remains committed to Coke's 2020 vision.
“Even though Coke's 2013 volume growth was tepid -- partly the result of emerging-market headwinds -- we believe the firm's economic moat remains wide with a strong brand portfolio that commands pricing power,” Mullarkey said.
The beverage company also said it's expanding a cost-cutting reinvestment program that it hopes will generate $1 billion by 2016. Coca-Cola announced earlier this month it's teaming up with Green Mountain Coffee Roasters to develop a Keurig Cold at-home beverage system.
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