A decision by Coca-Cola to shift efforts toward what they saw as the changing tastes of consumers appears to have paid off. Recently released quarterly reports on profit and revenue show that the company outperformed all estimates by analysts. The company did exceptionally well with sales of premium water and drinks that contain no sugar.
Coca-Cola has been busy lately building a collection of non-carbonated drinks. They have also increased there investments in smart water and smart waters filled with electrolytes. This approached has been mirrored by the company’s main rival Pepsi Co.
Coca-Cola spent more than five billion dollars to purchase the number two coffee chain in the world, Costa. The company also purchased a sizeable stake in the BodyArmour sports drink that was backed by NBA legend Kobe Bryant. This was part of an attempt by the company to appeal more to the younger generation.
James Quincey, the chief executive officer of Coca-Cola, sidestepped talk that the company is seeking to develop a soft drink infused with cannabis. These rumors come at a time when marijuana legalization is taking place in many states across the country.
Quincey says that the company has no plans to enter the cannabis space at this time. He also told analysists who took part in a post-earnings call that the acquisitions made in the past quarter are not necessarily a sign of future events. Mergers and acquisitions, Quincey explained, are not their own strategy. He told analysts that mergers and acquisitions are tools to implement the strategy.
Organic revenue rose six percent in the third quarter of 2018. This growth spurt was led by double-digit growth for the beverages Coca-Cola Zero Sugar and Diet Coca-Cola.
Volume grew two percent for the quarter. This statistic is viewed as an indication of consumer demand for the product.
Coca-Cola launched a new Diet Coke slim line that comes in a variety of flavors including feisty cherry and ginger lime. The company promises also to introduce new variations of their smart water brand.
The strategy was enacted just after Quincey’s appointment a year ago and has drawn support from analysts on Wall Street. One analyst, working for Wells Fargo, specifically pointed to Coca-Cola’s of a strong top line as an indicator that its efforts at transforming the company portfolio is currently successful.