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Coca-Cola’s health kick fails to offset challenges overseas
Coca-Cola’s health kick fails to offset challenges overseas

Coca-Cola’s health kick fails to offset challenges overseas

FMCG SUPPLIER NEWS

ESM.com - Feb 10th 2017, 09:04

Coca-Cola Co.’s bid to offer lower-calorie containers and healthier options has yet to fix its daunting challenges overseas. 

The company has been steering customers toward more wholesome beverages, water, and smaller cans, especially in its home market. The idea is to appeal to health-conscious consumers, with the added bonus of generating higher profit margins. But currency fluctuations, sluggish international economies, and pressure on its core business -- soda -- continue to cloud the company’s future.

Coca-Cola on Thursday predicted an earnings decline of as much as 4 percent in the coming year. The company, which sells products in more than 200 countries, is dealing with especially strong headwinds in emerging markets such as Latin America.

Coca-Cola is facing “persistent macroeconomic pressures in our emerging and developing markets,” Chief Executive Officer Muhtar Kent said in a statement on Thursday.

The Atlanta-based company reported a 2 percent decline in sparkling beverage volume during the fourth quarter. Its still-drink category -- a proxy for some of its healthier options -- rose 2 percent, but that remains a smaller piece of the business. Earnings amounted to 37 cents a share in the period, matching analysts’ estimates.

Three-Decade Low

In North America, the picture was brighter: Smaller package sizes helped revive soda sales in the fourth quarter and stem volume declines for the year. Sparkling beverage volume grew 1 percent in the final three months of 2016. The company is coming off a grim stretch for the soft-drink industry: U.S. per capita consumption hit a three-decade low in 2015, according to Beverage-Digest, a trade publication.

The overall results underwhelmed investors, who sent the shares down as much as 2.3 percent to $41.06 in early trading. The stock fell 3.5 percent last year, hampered by the company’s difficult outlook.

The great shrink down of its containers has improved Coca-Cola’s price mix, helping it meet earnings estimates in the latest quarter. And the company has made efforts to push other options with less sugar, aimed at consumers looking to curb their calorie intake. Coca-Cola Zero Sugar case volume grew by a percentage in the double digits in Western Europe during the fourth quarter. The company plans to expand distribution of the product in 2017 to more European markets.

Coke is also pushing Smartwater, one of its bottled-water brands, to new markets around the world, citing growth of the brand as a positive for the quarter.Content ©2017 European Supermarket Magazine 

Read more about: coca cola

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