Coca-Colas 2018 Christmas truck tour in Glasgow TODAY at Glasgows Silverburn Shopping Centre for first stop …

Coca-Cola\s 2018 Christmas truck tour in Glasgow TODAY at Glasgow\s Silverburn Shopping Centre for first stop ...

Coca-Cola proposes energy drinks in clash with Monster Beverage

Few of us would pop open a bottle of Coke to mark a moment of jubilation. But there is much to celebrate in figures from Coca-Cola Hellenic Bottling Company, which gushed 5 per cent higher on the back of a solid third-quarter trading update.

Stripping out currency fluctuations, revenue growth was slightly ahead of consensus at 4.5 per cent, thanks to stronger-than-expected volume growth of 4.2 per cent. The average revenue per case of bottles shipped dropped, reflecting primarily the timing of price increases in the year.

An example of this philosophy can be seen in Coca-Colas recent approach to bottled water. As the market for generic bottled water has decelerated, crimping volume growth, management has emphasized specialty waters and higher-margin variants. Quincey walked through examples of recent bottled water priorities, from the companys acquisition of niche mineral water brand Topo Chico last year to a shift toward higher-end products in China and innovation in Ciel, one of its chief Latin American bottled water brands. The CEO asserted that the company is “moving out of the phase of deprioritizing [low-value water orders] and starting to see some of the benefits of our focus on the premium orders.”

The group, one of the worlds biggest Coca-Cola bottlers, said trading last month had been strong. It was confident that an acceleration in the fourth quarter would enable it to report another year of good growth in both…

Decisions like this mirror the companys larger journey from a volume-based manufacturing business to a brand marketer with higher gross and operating margins. As outgoing CFO Kathy Waller observed on the call, Coca-Cola sold its Canadian bottling operation at the end of the third quarter, marking the last of its North American bottling operations to be refranchised (i.e., sold) under its transition to a capital-light business model. The global beverage titan isnt eschewing growth — quite the opposite. But price hikes in its biggest market and a de-emphasis on lower-margin products indicate that Coca-Cola is now extremely attuned to the quality of the growth its seeking. 

Australias major non-alcoholic beverages companies have made a pledge, and your favourite sugary drinks are about to be a lot less sweet!

But so many transactions need oversight in order for Coca-Cola to achieve its desired return on investments. The company has formed a Global Ventures Group to facilitate deal making and to ensure that new purchases will be smoothly integrated into Coca-Colas distribution network. The Global Ventures Group will also be responsible for transferring successful products and strategies gleaned from acquisitions throughout the Coca-Cola system at a faster pace. This mimics Coca-Colas recent “lift and shift” model of transferring successful internal brands across geographical territories.

Coca-Cola has a new beverage on the way, but Australians might miss out. Picture; AAP/Angelo VelardoSource:News Corp Australia

COCA-COLA plans to launch a range of energy drinks as the company attempts to break away from traditional soft drinks and capture the attention of health-focused consumers.

The Coca-Cola Company (NYSE:KO) reported vigorous organic revenue growth of 6% in the third quarter of 2018 against the prior year, propelled in part by surprising expansion in flagship carbonated soft drinks like trademark Coca-Cola and Diet Coke. Better earnings results and numerous recent business transactions may portend a higher level of growth. Below, lets isolate three comments made by CEO James Quincey during the companys earnings conference call on Oct. 30, which illuminate growth factors as well as challenges ahead.

The company’s American division made the announcement yesterday, telling Reuters the drinks would be branded “Coca-Cola Energy” and “Coca-Cola Energy No Sugar”.

Yes, so clearly weve taken some price increases this year in the U.S. marketplace, whether thatd be in the juice category by changes in the packaging, in soft drinks, in the number of channels…were doing a lot of things to engage the consumer with the various categories in our portfolio from the marketing [to] the packaging, working with our customers to create value for them.

Coca-Cola bought South Aussie kombucha tea maker Mojo in September. Picture: Tom HuntleySource:News Corp Australia

In addition, Coca-Cola purchased minority stakes in sports drink company BODYARMOR and Australian cold-pressed fruit juice and high-protein smoothie company Made Group. The conglomerate stepped into the kombucha market by snapping up Australia-based Organic & Raw Trading Co. and widened its nonsparkling bottled fruit portfolio with the purchase of French brand Tropico.

It’s been a big year for the beverage manufacturing company. In September Coca-Cola Australia snapped up South Australian kombucha tea maker Mojo for a multimillion-dollar sum.

Coca-Cola has initiated a swirl of mergers-and-acquisitions transactions over the last several months — many of them falling in the third quarter. The companys pending $5.1 billion acquisition of Costa Coffee from Whitbread PLC marks its entry into the retail coffee business, with opportunities for expansion in the global ready-to-drink coffee market.

Just days earlier, the American arm of the company revealed it was studying Cannabidiol – a key ingredient of marijuana – in response to an increased demand for “wellness beverages”.

The most surprising aspect of Coca-Colas quarter was a resurgence in its sparkling drinks category. Carbonated soft drink unit case volume rose 2% year over year, led by trademark Coca-Cola and also low-calorie and no-calorie variants of Sprite and Fanta. The company noted that Coke Zero Sugar posted its best growth in 10 quarters.

US Consumers have not been told when they can expect to see Coke’s latest concoction on supermarket shelves, but it does face a legal challenge.

[W]e are growing the soft drink category in revenue and volume, the Coke trademark is growing, Coke Zero Sugar is growing. So I think, were seeing the sales and volume and transaction uplifts, engagements by the consumers with the brand. So we think were at a good place in terms of what our marketing is delivering for us.

Coca-Cola became the largest shareholder of Monster Beverage Corporation in 2015, and its latest venture could put it in direct competition with the popular energy drink maker, violating their agreement.

In the U.S., Coca-Cola has responded to commodity input price increases and other inflationary pressures by incrementally pushing up prices. This has been initiated with a bit of moxie and without regard to the larger market: As an analyst on the call pointed out, rival PepsiCo hasnt yet followed suit. 

News Corp contacted Coca-Cola Australia, where a spokesperson was quick to shut down any speculation that new beverages might reach our shores.

Quincey reminded investors during the call that the company utilizes acquisitions to fill in gaps in its portfolio or accelerate into promising markets. He cautioned shareholders against extrapolating from the activity of a single quarter and expecting such an accelerated pace of deals to continue. 

“I understand it’s not going to be launched anywhere until at least April next year,” the spokesperson said.

The organizations willingness to increase pricing in a moderately expanding economy is an example of its intent to wring value out of all facets of its business, as differentiated from a strategy in the near past that often relied primarily on volume growth to drive net earnings. 

“As a total beverages company, Coca-Cola is constantly looking for ways to innovate and meet changing consumer demand which is why we regularly launch new beverages here and around the world.

“We do not have an announcement to make about a new beverage in Australia at this time.”

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Coca-Cola Australia said there are no plans for a new beverage. Picture: AFP/Daniel Leal-OlivasSource:AFP

Asit Sharma has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Just a few weeks ago, Aussie Coca-Cola fans were left disappointed at news they would not be able to get their hands on a new cinnamon flavour released across the UK.

In addition, Quincey mentioned that Diet Coke is exhibiting volume growth again in the U.S. (as a result of its flavor extension and packaging redesign).

The Sun reported the spice would be added to Coke’s Zero Sugar range, available in 500ml or 1.25 litre bottles.

But when news.com.au contacted Coca Cola-Australia to find out whether it would make its way down under, a spokesman broke some bad news.

“We are always responding to people’s changing tastes and preferences and we regularly introduce exciting new flavours in Australia such as Coca-Cola Orange No Sugar which is available now,” the spokesman told news.com.au.

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