Brands & Promos

Coca-Cola, Pepsi brands result suggests shift to Zero Sugar demand

Coke and its smaller rival PepsiCo Inc have been focusing on healthier drinks to garner market share as health-conscious consumers shift away from sugary sodas. In Nigeria adults are gradually dumping the sugar flavours for zero sugar or diet because of increasing sugar related health issues.

Coca-Cola had earlier this year launched new flavours of its popular Diet Coke brand in slimmer packaging and debuted Coca-Cola Stevia No Sugar in New Zealand and dairy-free smoothie AdeZ in Europe in the quarter. Organic revenue, or sales from its core beverage business, rose 5 percent in the quarter, with Diet Coke, Coke Zero and sparkling water contributing the most.

Volumes, a key indicator of demand, grew 2 percent in the quarter on strong performance of its trademark Coca-Cola brand, and Fuze Tea. Organic sales in Europe rose 7 percent after the company reformulated its recipe for a few sodas in response to U.K’s tax on sugar.

“We were impressed with Coca-cola’s ability to deliver a strong and balanced topline,” Wells Fargo analyst Bonnie Herzog wrote in a note. Sales in North America – its biggest revenue generating region – rose 7 percent to $3.12 billion, but missed analysts’ average estimate of $3.14 billion, mainly due to a drop in demand for juices and plant- based beverages. Net income attributable to the company’s shareholders rose to $2.32 billion, or 54 cents per share, in the second quarter ended June 29, from $1.37 billion, or 32 cents per share, a year earlier.

Excluding one-time items, Coca-Cola said it earned 61 cents per share, beating analysts’ average estimate by a cent, according to Thomson Reuters I/B/E/S. Revenue fell 8 percent to $8.93 billion, hurt by the divestiture of its low-margin bottling operations. Analysts had estimated sales of $8.54 billion.

Coca-Cola reaffirmed its 2018 profit outlook and said it expects full-year organic revenue to be at least 4 percent. Shares of the Atlanta-based company were marginally up at $45.50 during premarket hours. Reuters