Tab isn’t the only beverage Coca-Cola is pouring down the drain.
The soft-drink giant plans to get rid of about 200 brands — or roughly half of its portfolio — in an effort to focus on its top-performing products.
The Atlanta-based company provided more details of the upcoming brand purge in its quarterly earnings call Thursday, about a week after announcing it would retire the pioneering diet soda Tab by Dec. 31 after a 57-year run.
Coke plans to shelve brands across all of its beverage categories, but the “hydration” segment will likely see a bigger reduction than the others, CEO James Quincey said. His comments came as Coke reported an 11 percent drop in quarterly sales volumes for its waters and sports drinks, which include the Dasani and Powerade brands.
The brands getting cut are also “much more local” than Coke’s better-performing drinks, according to Quincey. He didn’t name names, but the company previously said it would be killing regional names such as Northern Neck Ginger Ale and Delaware Punch.
“There’s going to be some brands we’re going to retire,” Quincey told Wall Street analysts Thursday. “But there are some brands where the better answer is to transition it into one of the regional brands.”
Coke has a clear financial incentive for the culling — in July, Quincey said more than half of its 400 master brands had “little to no scale” and accounted for just about 2 percent of the company’s total revenue.
The restructuring will also free up money for Coke to invest in growing labels like Minute Maid and roll out new products such as the recently announced Topo Chico Hard Seltzer, the company has said.
Coke on Thursday reported net revenues of $8.7 billion for the quarter ending Sept. 25, which reflected a 9 percent decrease but still beat Wall Street’s expectations for about $8.4 billion, according to Bloomberg data.
The company’s stock price was up 0.2 percent in premarket trading Friday at $50.79 as of 7:55 a.m. after rising roughly 1.4 percent Thursday.
Credit: Source link