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Coca-Cola’s Volumes Continued to Be Unimpressive in 4Q17

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Feb. 22 2018, Updated 12:36 p.m. ET

Flat volumes

Coca-Cola’s (KO) unit volumes remained unchanged on a year-over-year basis in 4Q17 as well as in full-year 2017. The company saw higher volumes in the developing and emerging markets, while volume growth in developed markets overall was flat in 4Q17. In particular, the company’s unit case volume in North America grew 1% in 4Q17.

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Volume by category

The unit case volumes of the company’s soda or sparkling soft drinks were flat on a year-over-year basis in 4Q17. Volumes of the company’s water, enhanced water, and sports drinks were up 2%, and tea and coffee volumes grew 2% as well in 4Q17. However, juice, dairy, and plant-based beverage volumes were down 2% in the quarter.

In full-year 2017, Coca-Cola’s sparkling beverage volumes fell 1%. Within the still beverage category, juice, dairy, and plant-based beverage volumes were flat, while water, enhanced water, and sports drink volumes grew 1%. Tea and coffee volumes rose 2% in 2017.

In fiscal 2017, PepsiCo’s (PEP) North America Beverages segment declined 3.5% on a year-over-year basis. This decline was caused by a 5% fall in the company’s carbonated soft drink volumes and a 1% decline in the volumes of its noncarbonated beverages.

Initiatives to improve volumes

Coca-Cola is trying to improve its beverage volumes by focusing on innovation of healthier products that cater to consumer needs. The company is introducing new flavors and is also reducing sugar levels in its beverages.

In January 2018, the company announced four new flavors under its Diet Coke brand in an attempt to improve the performance of the diet version.

We’ll discuss the company’s margins in the next part of this series.

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