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March 12, 2008
The Trouble with Coke
Good stuff in a new report from Beverage Digest. A fairly remarkable downturn in the soft drink market is accelerating. Total U.S. sales fell 2.3 percent in 2007, which was worse than the 0.6 percent drop in 2006, which was, in turn, worse than the 0.2 percent decline in 2005. Ugly stuff.
The carbonated soft drink industry has moved from roughly 3 percent growth in the 1990's to increasing rates of decline in the last three years.
Then again, the U.S. is doing its best to keep Coke afloat:
Even with the recent declines, the U.S. still has the highest carbonated soft drink per capita (consumption) in the world.
Ahhh, that's so darn helpful to both beverage companies and Britesmile.
[Beverage Digest via Reuters]
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Dennis
Coke has been feeding this line of garbage to everyone since the 80's. Tomorrow may never come for Coke due to the fact that they do have inferior mgt. Their business model in the states is flawed and their ethics is questionable. Ask anyone that has worked there.
Regarding Coke, only 25% of their case volume (including non-soda brands) comes from the U.S and Canada. Their five-year case volume growth rate in this region is 1%, although it actually declined by 1% in 2007. Declining soda consumption in the U.S. more than offsets growth in their other brands.
Worldwid, their numbers are much stronger. Latin America accounts for 27% of KO's case volume and it witnessed 9% volume growth in 2007. Africa and Eurasia combine for 17% of volume and grew at a double-digit pace.
The Pacific region, which includes Australia, Japan and China, is currently only 16% of case volume. However, in 2007 the region consumed 42 servings of Coke products per capita, compared to a worldwide average of 83 servings. As this region continues to grow and have more money available for beverage consumption, that per-capita consumption will increase and approach, if not surpass, the world average. Remember that this region has over 1.5 billion people, and now think about how many Cokes will be sold at the Olympics this summer...