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Zero-sugar drinks and smaller cans drive Coca-Cola revenue

COCA-COLA has today launched the new Coca-Cola No Sugar in Australia after years of research to create the best tasting sugar-free Coke ever. Coca-Cola No Sugar has been designed to taste as similar to the original Coca-Cola Classic as possible – and will become a new permanent member of the Coca-Cola family. Available nationally from June 16 2017, the company will give away more than two million free samples to mark the launch. Pictured: Coca-Cola No Sugar drinks in front of the iconic Coca-Cola sign in Kings Cross, Sydney, Australia.

Coca-Cola beat estimates for quarterly revenue on Friday as customers took to smaller-sized cans of its sodas, including Coca-Cola Zero Sugar, prompting the beverage maker to give an upbeat forecast for 2019.

Faltering demand for sugary drinks has forced the world’s two largest beverage makers, Coca-Cola and PepsiCo, to roll out low-sugar drinks, while diversifying into coffee, tea and bottled waters to boost sales.

Coca-Cola has also been rolling out new products such as Coca-Cola Plus Coffee, a blend of its trademark soda with coffee in more than 20 markets, as well as drinks in small but high-margin packs that are appealing to consumers who are turning more health conscious.

The beverage maker is launching Coca-Cola Energy, its first Coke-branded energy drink, in the United States, and has expanded its coffee business with the multi-billion dollar purchase of Britain-based Costa Coffee last year.

Volume in sparkling soft drinks rose 2 per cent in the quarter, driven by double-digit percentage growth in Coca-Cola Zero Sugar and Sprite in North America.

Strong growth was also seen in its smaller package drinks, led by double-digit growth in 7.5-ounce mini-cans.

Organic revenue, that excludes the impact of currency fluctuations, acquisitions and divestitures, climbed 5 per cent during the quarter, above the average analyst estimate of 4.3 per cent, according to five analysts polled by Refinitiv.

Shares of the Atlanta-based company rose 2 per cent before the opening bell, adding to the 14 per cent they have gained this year.

“We were very impressed with Coca-Cola’s better-than-expected topline,” Wells Fargo analyst Bonnie Herzog said.

Coca-Cola also said it now expects full-year organic revenue growth to be at least 5 per cent, from its previous forecast of 5 per cent growth.

Overall, revenue rose 8.3 per cent to US$9.51 billion in the third quarter ended Sept. 27, beating the average analyst estimate of US$9.43 billion, according to IBES data from Refinitiv.

The beverage maker maintained its full-year profit forecast even as it lowered its capital expenditure forecast for the year to about US$2.2 billion from its prior target of about US$2.4 billion.

Earlier in the month, PepsiCo Inc also reported better-than-expected quarterly profit and sales, benefiting from an advertising blitz and demand for its low-calorie beverages in North America.

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