Coca-Cola (NYSE:KO) is pleased with its growth, having delivered terrific results again in the second quarter. The beverage company performed well in a sluggish global economy. In order to accelerate its growth momentum further, Coca-Cola is working on its five global strategic priorities, and the company is pleased with the success of its initiatives as it justified its moves by delivering 3% volume growth last quarter. Now, looking ahead, Coca-Cola is now more focused toward the growth as the beverage industry is still vibrant, giving ample opportunities to the company to gain from it.
Gaining good traction
Coca-Cola is pleased with its robust performance on the international front. Europe, Eurasia, and Africa remain some of the most promising markets for Coca-Cola. The company is expecting further balanced volume growth from these markets. On the other hand, Asia, China, India and Japan are yielding better than expected results, delivering 9%, double-digit, and 1% growth, respectively. Moreover, in Latin America, despite a stiff macroeconomic environment, Coca-Cola is expecting solid growth on the back of its strategies.
- Warning! GuruFocus has detected 6 Warning Signs with KO. Click here to check it out.
- KO 15-Year Financial Data
- The intrinsic value of KO
- Peter Lynch Chart of KO
Coca-Cola will be focusing more on its million dollar sparkling best-selling brands such as Fanta, Coca-Cola, Zero, and Schweppes, which are doing well for the company. The beverage company saw some weakness in its diet coke and Coca-Cola light sales, and is planning to focus more on bringing its sales in line with expectations.
An impressive campaign and brand expansion
Moving on, Coca-Cola’s Coke campaign is rolling out well and has helped the company gain market share as a result of its success. The company is now focusing on the expansion of this campaign. It has taken many initiatives to execute this. Coca-Cola is extending the program to include all Coca-Cola trademark immediate consumption and future consumption packs, and is increasing the number of names from 250 to 1,000 per market in its North West Europe and Nordics business units. This is expected to benefit the one of the world’s most well-known beverages brand.
The beverage company is also focusing on ramping up the production of Coca-Cola mini can as the company is seeing lot of traction for it. In the last quarter as well, Coca-Cola saw an impressive 60% volume growth, including a double-digit jump in mini cans.
Coca-Cola’s second initiative sticks around strengthening its still beverage portfolio. The company thinks there is some more room for this segment to grow, as in the past the company saw a healthy 6% growth in the still beverage segment on a yearly basis, including sports drinks, tea, energy, coffee and water, which were the main contributors.
In its juice segment, Coca-Cola is putting efforts to strengthen its leading brands such as Maaza and Rani. The beverage company is focusing on strengthening its premium water brands such as Smartwater in North America, I Lohas in Japan, and Vio in Germany in order to use the gains arising from these to improve its value chain. Further, Coca-Cola is expanding its brand margin in North America with Smartwater and the addition of Dasani Sparkling and Dasani Drops.
Another exciting event that Coca-Cola is counting on is its partnership with Keurig Green Mountain, as with Keurig, the company is expected to create a leading position in the single-serve category.
Coca-Cola has a strong investment plan that aims at strengthening its brands. It is maximizing its productivity to keep its objectives in line with the plan to increase media investments in tea markets. Coca-Cola is focusing on improving its sales. It is focusing on investing in new plans, new distribution capabilities, coolers, and marketing. Hence, Coca-Cola still looks like a good investment on the back of its smart strategies.