Coca-Cola’s soft drink revenue grows thanks to smaller packs
Coca-Cola North America president Sandy Douglas says the company’s soft drink revenue is growing in the US thanks to strong sales of smaller packs.
Transaction packs, including mini cans and other smaller packaging, now account for 15% of Coca-Cola’s retail sales value in the US – up from 10% six years ago. Mini cans, in particular, grew by double digits in the last year, as measured by Nielsen.
In contrast, 2-litre bottles and other larger commodity packs now account for about 50% of this mix, down from more than 60% in 2011.
“As long as the consumer wants things that are different than what we have, we can get there if we’re good at moving at the speed of the consumer,” Douglas said.
And while sparkling volume is declining, the company’s core sparkling brands like Coke, Sprite and Fanta are growing in dollar sales thanks, in large part, to a focus on smaller, more convenient and on-trend packages.
“If you analyse in the North America market or the global market – one, three, five years out – the most growth dollars in beverages are still going to come from sparkling,” Douglas added.
He also spoke about the company’s continued efforts to refranchise all remaining company-owned bottling territory in the US.
The activity stretches back a decade and could be completed by the end of this year, the company said in May.
“The net effect is that our business has been growing ahead of the category now for over seven years,” Douglas continued. “The bottlers are coming into their own, the enthusiasm in our system is very high, and the competition to get into the system reflected a bullishness for the beverage business in the US that I think has given us a lot of confidence.”
In a wide-ranging interview with Lauren Lieberman from Barclays Capital, Douglas also spoke of the “tremendous opportunity” that exists for Coca-Cola within e-commerce, but warned against discounting traditional brick-and-mortar retailers completely.
“Don’t count out the brick retailers,” he said. “They’re moving fast. They have significant assets, and they’re working to serve the shopper. And don’t think of e-commerce as a channel. It’s a way for consumers to research, to buy, to experience brands and then, ultimately, to have them have fulfilled.
“The clicks are looking for bricks, and the bricks are looking for clicks.”