beverages

Financial Snapshot: Zero Sugar Lifts Coca-Cola, Drinks Boost Post


Coca-Cola’s stock price bubbled to a five-year high upon the recent release of stellar second-quarter revenue growth and profits, while beverages were one of the best business segments at Post Holdings in its third fiscal quarter.

In its second quarter, Coca-Cola’s namesake Coke beverage rose 4% in volume. One sweet spot in particular was Coca-Cola Zero Sugar, which posted the seventh consecutive quarter of double-digit global volume growth.

On a call with investors, CEO James Quincy led off with a reference to Coca-Cola’s “transformation as a total beverage company,” noting that almost 25% of revenue is now from new or reformulated products, up from 15% two years ago.

Coca-Cola Energy launched in Spain in April 2019 and has captured 2% share of the energy category there, according to Quincy.  The product is currently in 14 countries and by the end of 2019 “should be available” in 20 markets, said Quincy. The company hasn’t said when the new energy drink will be launched in the United States.

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Another noteworthy launch was the Costa Coffee brand of canned coffee drinks, stemming from Coca-Cola’s partnership with Costa Coffee, the U.K. brand the company acquired earlier this year. There’s been no determination as to when Costa Coffee will be available in the U.S.

In Australia, the company just launched NutriBoost after learning from its success with the product in Vietnam, according to Quincy. NutriBoost is a nutrition-positioned milk drink with no added sugar that was designed for “busy families looking for a mid-morning or afternoon energizing snack.”

Culling Coca-Cola’s portfolio has resulted in more than 275 “zombie SKUs” being eliminated so far this year, Quincy said.

For Post Holdings, ready to drink (RTD) protein shakes/beverages, powders and nutrition bars registered an increase of 9.8% in the company’s third quarter. Growth in RTD protein shakes and other RTD beverages was partially offset by declines in nutrition bars and powders. RTD protein shake net sales grew 19%.

Post saw net sales of its ready-to-eat cereals business in North America increase by 1.7% in the quarter. “Volumes increased 0.4% as growth in private label and Honey Bunches of Oats was partially offset by declines in certain licensed products, Pebbles, Great Grains and Malt-O-Meal bag cereal,” the company said in a statement. Over the nine-month period, net sales rose 2.0%.

On July 22,  Post and TreeHouse Foods announced that Post’s previously announced acquisition of TreeHouse Foods’ private-label ready-to-eat cereal business was being reviewed by the Federal Trade Commission. Closing of the transaction will be delayed beyond July, Post said.

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