Coke bets on smaller packages to boost sales

Coca-Cola is betting that smaller packaging, with proportionally higher prices will boost sales of the company's soft drink business this year. The Chief Executive of Coca-Cola, James Quincey, told investors in a teleconference held on Friday (16/02), that can of coke of 220 ml and other products in reduced packaging are still selling quickly and are a fundamental part of the their plans to increase organic revenue in 4% this year. He also pointed to a turnaround in sales in countries such as India and Brazil. Analysts questioned whether the goal of Coca-Cola to the organic revenue, which excludes the Exchange variation, acquisitions and divestments, is realistic. Beverage companies have seen soft drink volumes fall, as consumers begin to prefer healthier options like water and teas, and analysts expect that sales across the industry grow between 2 percent and 3 percent this year. Quincey said in Conference call with reporters that the minilatas and other discounted packages represent between 10% and 20% of Coca-Cola's sales by volume and he expects this percentage to grow gradually over the next few years. The company introduced the minilatas in the United States in 2010 and, since then, relied on them and in other smaller packages to offset volume declines. "It's a continuous evolution because, in the end, you still need to get closer to their consumers to understand why this is an interesting option for them," he said. Coca-Cola, whose brands include Sprite and Powerade, also expects new flavors of Diet Coke and the redesigned cans help to reduce losses in its soft drink business. U.s. volumes of Diet Coke, third biggest soda in the United States, fell 4.3% last year, according to industry publication Beverage Digest. "I'm not sure that just the flavors and packaging will lead us to these results, but it certainly will be a next step in the right direction," Quincey said, when asked about recent sales results. The global sales volume of Coca-Cola was stable in the fourth quarter, as volume of carbonated beverages, including soft drinks, soda water and energy. The segment volumes of teas and coffee, which includes the mark Honest Tea, grew 2 percent. The volumes of water and sports drinks also grew 2%, while juices and milk drinks retreated 2 percent. The company's fourth-quarter revenue fell 20% to $ $7.5 billion, with negative effect of refranquia of bottlers, which aims to reduce costs. Organic revenue increased by 6%. Swing Coca-Cola reported a loss of $ $2.8 billion, or $ $0.66 per share, compared with a profit of $ $550 million, or $ $0.13 per share, a year earlier. The damage ran from a low of $ $3.6 billion in the fourth quarter, relating to the change in the tax burden in the United States. Excluding non-recurring items, earnings per share was $ $0.39, compared to $ $0.37 per share a year earlier. Analysts had expected an adjusted profit per share of $ $0.38. The shares, which fell around 2 percent this year, rose less than 1 percent in early trading Friday. Coca-Cola named this week two new members to the Board of Directors: Christopher Davis, President of Davis Advisors investment firm, and Caroline Tsay, President of Compute Software. With this, the company increased the Board of Directors of 14 to 16 members.