Coke shakes off pesticola bug, volumes rise 4% in Q3
Coca-Cola India has reported a 4% increase in unit case volume in the third quarter which ended on September 30, compared to a de-cline of 22% in the year-ago quarter, according to the quarterly results announced by The Coca-Cola Company in Atlant...
By Chaitali Chakravarty, TNN |
NEW DELHI: Coca-Cola India has reported a 4% increase in unit case volume in the third quarter which ended on September 30, compared to a de-cline of 22% in the year-ago quarter, according to the quarterly results announced by The Coca-Cola Company in Atlanta last week.
The soft drink company bettered its performance in the quarter that saw the pesticide-in-cola controversy resurface, threatening to severely impact sales.
The parent company said, “Continued investment in marketing initiatives around the quality and safety of our products and focus on execution in the consolidated bottling operations delivered solid results even with the renewed unfounded allegations in the quarter of unsafe pesticide levels in the company’s products. The company will continue to aggressively address these allegations, but remain cautious on its outlook for the rest of the year.”
The pesticide controversy in colas resurfaced in August when the Centre for Science and Environment (CSE) announced a new study which alleged the presence of pesticides in both Coca-Cola and Pepsi. Sales plummeted instantly and the industry feared that the impact would remain for the rest of the year like in ‘04, when the controversy broke.
However, sources said proactive communication — ads featuring Pepsico chairman Rajeev Bakshi and film actor Aamir Khan assuring consumers about the quality of Pepsi and Coke — seemed to have worked.
ADVERTISEMENT
Coke nevertheless continues to trail behind its internal target, which is 25% growth in ‘06. Perhaps what’s heartening for the company is that it has shown positive volume growth after almost two years of negative quarterly growth. This year, the company is focused on making the business profitable, sources said. The company has decided that it will not drive volume at the cost of profitability. Also, the company has plans to derisk itself by introducing health beverages such as juice and flavoured water.
Worldwide, Coke’s unit case volume is up 5% for the third quarter, led by 7% growth in Coke’s international markets — countries other than the US. Carbonated beverages grew 5% in the quarter, the highest growth since ‘00.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
