Coke Widens Sale of Cola Variants -- WSJ
April 24 2019 - 3:02AM
Dow Jones News
By Jennifer Maloney
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 24, 2019).
Coca-Cola Co. is expanding its namesake brand, pushing forward
with overseas rollouts of a coffee-infused variant and an
energy-drink version of Coke.
After testing Coca-Cola Plus Coffee last year in Asia, the soda
giant now plans to launch it in 25 markets by the end of this year,
Chief Executive James Quincey said on a call with analysts.
Meanwhile, he said, the company will forge ahead in Europe with
Coca-Cola Energy, despite objections from its partner Monster
Beverage Corp.
As Coca-Cola diversifies beyond soda into water, coffee, juice
and other drinks, it is also looking to offer new variants of its
flagship brand, Mr. Quincey said. Coca-Cola Zero Sugar, a
reformulated diet version, grew by double digits in the latest
quarter. And in the U.S., where price increases and a late Easter
holiday contributed to a 1% drop in case unit volume, the company
said the launch in February of Orange Vanilla Coke, its first new
flavor in a decade, helped drive 6% retail sales growth for the
Coca-Cola brand.
Rival PepsiCo Inc. also is experimenting with new versions of
its namesake brand. The company is launching three new Pepsi
flavors in the U.S. made with real juice: berry, lime and mango. At
the same time, the snacks-and-soda giant is revamping package
designs for two existing flavors, Pepsi Wild Cherry and Pepsi
Vanilla. Berry, Lime and Mango will be available at national
retailers until June 14, and after that at Walmart and Target
stores.
Mr. Quincey said the coffee version of Coke is designed to
appeal to people who need a midafternoon pick-me-up at work.
Coca-Cola Energy offers a stronger caffeine boost than regular Coke
and has a new taste, he said.
Coca-Cola owns an 18.5% stake in Monster, the leading energy
drink in the U.S., and distributes the brand through its bottling
network. Monster has said the launch of Coca-Cola Energy is a
violation of an agreement the companies struck in 2015. The
complaint is now in arbitration.
Brands such as Monster and Red Bull have propelled energy drinks
in North America and Europe. But the category is still nascent in
emerging markets, presenting an opportunity to introduce a drink
that blurs the boundary between an energy drink and a cola, Mr.
Quincey said. "We think it will help complement the other brands
that sell successfully in this category," he said.
Coca-Cola Co. said sales grew in the latest quarter, helped by
bottlers in the U.K. and Europe stocking up on concentrate ahead of
a potentially disruptive Brexit. Organic revenue, which excludes
currency swings, acquisitions and divestitures, increased 6% in the
first quarter from a year earlier. Unit case volume grew 2%, helped
by 6% growth in bottled water, enhanced water and sports
drinks.
The deadline for the U.K.'s planned exit from the European Union
was earlier set for March 29. Bottlers built up their inventory in
advance of that date in case Dover and other U.K. ports were
disrupted and delayed transport of beverage concentrate from
Ireland through the U.K. to Western Europe, Mr. Quincey said in an
interview. The Brexit deadline has been rescheduled for
October.
Coca-Cola in the first quarter completed its $5.1 billion
acquisition of British coffee-shop chain Costa and plans to launch
its first ready-to-drink Costa products this spring, Mr. Quincey
said. Costa serves its red-and-white cups of coffee in its roughly
3,800 cafes, including about 2,500 in the U.K. and a growing
presence in China. The launch of new bottled Costa drinks will be
concentrated in markets where the chain already has a presence, Mr.
Quincey said.
Coca-Cola shares rose 2% in morning trading.
Kimberly Chin contributed to this article.
Write to Jennifer Maloney at jennifer.maloney@wsj.com
(END) Dow Jones Newswires
April 24, 2019 02:47 ET (06:47 GMT)
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