Alongside solid first quarter results yesterday, Coca-Cola revealed plans to roll out its new coffee-infused drink and introduce ready-to-drink (RTD) Costa products.
Amid its continuing moves to evolve and diversify its range as consumers move away from traditional fizzy drinks, the group revealed that it will releasing Coca-Cola Coffee in more than 25 markets around the world by the end of 2019 following successful trials.
The coffee-infused chilled drink has slightly less caffeine than a normal cup of coffee but more than a regular Coke, and is aimed at workers seeking an afternoon boost. In line with consumers choosing less sugary options, the product also contains less sugar.
“Coke Coffee was designed to reach consumers during specific occasions and channels like the mid-afternoon energy slump of work,” said CEO James Quincey, adding the launch was part of the company’s efforts to become a “total beverage company”.
Coca-Cola also revealed that it will roll out RTD versions of Costa beverages later this year. The firm acquired the British coffee chain from Whitbread last year in £3.9bn deal.
Coca-Cola stated that had completed a smooth transition of Costa and would “begin to leverage Costa’s scalable platform across formats and channels” with the introduction of RTD products under the brand in the second quarter. It declined to provide details about the new coffee drinks.
“We’re in early days of working out exactly how we’re going to bring to life the synergy plans for greater revenue growth and profit growth,” Quincey added.
Coca-Cola’s first quarter results topped expectations with revenue and profit boosted by demand for its new drink flavours, sugar-free options, and product innovations, as well as Brexit stockpiling.
Net revenues for the period grew by 5% (+6% underlying) to reach $8.02bn, while operating income jumped 29% to $2.34bn. As a result, Coca-Cola reaffirmed its guidance for the year, expecting approximately 4% growth in organic revenue and 10-11% growth in comparable operating income.
The firm had a particularly good quarter in its Europe, Middle East & Africa business unit, where revenue growth of 5% helped offset declines in other regions – particularly Latin America. Revenues in North America were up 1%.
Global sales of sparkling soft drinks grew 1%, driven by strong performance from its Coca-Cola Zero brand. Its water and sports drinks unit, which has become a key focus of the company’s growth plans, saw a 6% rise in revenue. Juice, tea and coffee sales were flat from the prior year, held back by weakness in some markets such as the Middle East and Turkey.
Quincey commented: “We’re encouraged by our first-quarter results as our disciplined growth strategies continue to deliver strong underlying performance. We remain confident in our full-year guidance as we continue to make progress on our transformation as a consumer-centric total beverage company.”
