Coca-Cola grows volumes and announces cuts

Ah, the sheer power of a global brand. North American brewers will be eating out their heart: while they watch beer volumes decline, Coca-Cola, the world’s largest soft-drink maker, reports volume increases and price hikes.

The company released fourth quarter 2011 results on 7 February 2012 which showed that demand was strong for its flagship Coca-Cola soft drink in North America, with volume sales gaining 1 percent even as the company raised retail prices for carbonated beverages by 4 percent.

With global volumes sales up 3 percent worldwide in the quarter, total sales rose 5.2 percent to USD 11 billion (EUR 8.3 billion), while net income fell to USD 1.65 billion (EUR 1.25 billion) from USD 5.77 billion a year earlier, when the company posted a gain from an acquisition. In the year-earlier quarter, Coca-Cola recorded a USD 5 billion gain for the 33 percent stake in Coca-Cola Enterprises it traded in the purchase of the bottler’s North American operations.

The company said it planned to reduce costs by USD 550 million to USD 650 million (EUR 490 million) by 2015 and use the savings to invest in its brands and offset higher commodities prices. Coca-Cola said it exceeded the USD 500 million (EUR 380 million) it sought to cut during the four years that ended in the last quarter.

The company is trying to expand sales of beverages in Asia with global marketing campaigns and products like its Minute Maid Pulpy juice drink. Sales volume in the fourth quarter climbed 5 percent in Japan and 10 percent in China.

Coca-Cola, which is facing higher costs for commodities like plastic and corn-based sweeteners, raised wholesale prices in North America by 1 percent for the year, less than the 2 to 3 percent it forecast in October 2011.