Not everyone is complaining about the delayed monsoon after all. Beverages major Coca Cola reported double-digit volume growth in the Indian market for its second quarter ended June 27, 2014. This comes after five successive slow quarters and a particularly weak second quarter in the 2013 when it had grown just 1 per cent.
The last time it clocked over 10 per cent volume growth was in 2012 and ended that calendar year with 16 per cent unit case growth in the country.
In the first quarter of the current year too it had clocked a mere 6 per cent rise in volumes as against 8 per cent growth in Q1 of 2013.
The firm attributed the strong growth last quarter in India to advancements in its price/pack architecture as well as a delayed monsoon season that led to an extended summer.
India also led the Asia Pacific Group growth which reported overall volume growth of 8 per cent in the quarter against a flat market in North America, Europe and Latin America. Only Eurasia and Africa churned out 5 per cent growth, to take the global volume growth to 3 per cent.
Within Asia Pacific, the group’s sparkling portfolio grew volumes by 9 per cent in the quarter, with brand Coca-Cola and Sprite both contributing significantly to this growth. Still beverage volumes grew 7 per cent in the quarter, with volume share gains in ready-to-drink teas and packaged water. China delivered 9 per cent volume growth and gained volume and value share in sparkling beverages.
From a net revenue standpoint, Europe was the only bright spot with 7 per cent rise while all the remaining markets either sported decline or flat markets in Q2.
This also catapulted European unit to become the single-biggest region in terms of both operating and profit before tax, overtaking Asia Pacific, which was the top region for the firm in terms of profits in Q2 2013.
Globally, net operating revenues declined 1.37 per cent to $12.57 billion while net profit declined 3.3 per cent to $2.6 billion during the quarter over the year-ago period.
Muhtar Kent, chairman and chief executive officer of The Coca-Cola Company, said, “At the beginning of this year, we shared our strategic plan to restore the momentum of our global business. As we now reach the midpoint of the year, we have delivered sound financial performance year to date and demonstrated sequential improvement in our global volume growth.”
Globally, beverage volume grew 5 per cent for the quarter and 6 per cent year to date. Solid volume growth was recorded in the quarter across multiple beverage categories, including teas (4 per cent), packaged water (+7 per cent) and sports drinks (+6 per cent), partially offset by a 1 per cent decline in its juice and juice drinks portfolio stemming from price increases taken in North America to cover higher input costs.
Worldwide sparkling beverage volume grew 2 per cent for the quarter and 1 per cent year to date. Globally, brand Coca-Cola volume grew 1 per cent in the quarter with Sprite up 6 per cent and Fanta up 2 per cent.
(Edited by Joby Puthuparampil Johnson)