Drinks supplier, Coca-Cola Amatil, says new products, such as Coke Life, and a focus on smaller cans will help lift sagging sales in Australia.
The company wants to cut its reliance on consumers who drink a lot of the group’s brands and attract a broader consumer base that may not often drink Coke.
“We’ll be successful if we’ve got more people enjoying a Coke – whether it’s a Zero, a Diet, a Life, a red Coke – every now and again, whatever works for them, and enjoying smaller pack sizes,”Coca-Cola Amatil MD, Alison Watkins, said.
The company launched smaller 250ml cans in 2014, and sales are tracking above expectations.
Coke Life, a lower calorie, naturally sweetened product, will be launched in April, as Coca-Cola works to re-engage with health conscious consumers worried about the sugar content of soft drinks.
The company’s net profit tripled in 2014 to $272 million, due primarily to fewer one-off items including writedowns and redundancy costs.
But profit before significant items of $375.5 million in 2014 was down 25 per cent from 2013.
Coca-Cola was impacted by weak consumer sentiment in Australia, as well as reduced or disappointing promotional activity, aggressive pricing by competitors, and a growing range of water and soft drink products.
Consumers drank more energy, sports and milk drinks, but that wasn’t enough to offset a decline in carbonated soft drinks.
The company says the worst is now behind it, and is targeting a return to mid-single-digit earnings growth over the next few years, and no further declines after a tough 2014.
“We’ve got some exciting new product launches to look forward to, we’ve got the Indonesian situation on a much more stable footing, so we do think the worst is behind us,” Watkins said.
Coca-Cola’s business in Indonesia and Papaua New Guinea suffered a 65 per cent earnings fall in 2014.
Market share was gained in Indonesia but intense competition limited price increases, and legislated increases in wages and fuel prices, plus a fall in the value of the Indonesian rupiah, increased costs.
Shareholders on Tuesday approved a $US500 million injection into Coca-Cola’s Indonesian business by parent The Coco-Cola Company, which will help the operation broaden its product range and make products more affordable.
Quay Equities head of trading Tristan K’Nell said Coca-Cola’s underlying profit missed market expectations, but a forecast of a return to profit growth in 2015 year was a positive for investors.
Its shares added 63 cents, or 6.31 per cent, to $10.61.
AAP
