Coke's Profit Slips as U.S. Soda Sales Fizzle

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EARNS COCA COLA
Mark Lennihan/AP
By CANDICE CHOI

NEW YORK -- Coca-Cola's (KO) fourth-quarter profit fell as the world's biggest beverage maker once again sold less soda in North America.

The maker of Sprite, Dasani and Vitaminwater water said Tuesday that sales volume declined 1 percent in North America. That reflected a 3 percent decline in soda, which offset improved performance by noncarbonated drinks such as Powerade. Last week, PepsiCo (PEP) also said its soda volume fell in the "mid-single digits."

Coca-Cola also saw slower growth in emerging markets such as India and China. Overall, global sales volume rose just 1 percent in the quarter as a result. The Atlanta-based company said it would intensify its cost-cutting to produce another $1 billion in savings by 2016, much of which would be reinvested into marketing.

"We know our business responds to marketing," CEO Muhtar Kent said in a call with reporters. While some jobs may be lost as a result of the cost cuts, he noted that other jobs might be created.

Although Coca-Cola and PepsiCo are tapping emerging markets for growth and sell a wide array of beverages, pressure is mounting for the two companies to figure out how to get soda sales moving in the right direction at home.

Americans have been cutting back on soda for years as beverage aisles have grown increasingly crowded with options such as Monster energy drinks or Sparkling Ice waters. Soda is also blamed for making people fat and, more recently, industry executives have blamed concerns about artificial sweeteners for a decline in sales of diet sodas.

In fact, Kent said the soda decline in North America over the past year was "largely due to softer Diet Coke volumes."

But he stressed that the company was working with "credible third parties" to address any "misperceptions" about soda, but didn't specify whom.
He expressed confidence that soda in North America can still grow and just needs improved marketing, innovation and on-the-ground sales execution.

Coca-Cola is testing new ventures in the meantime. The company rolled out a drink called "Coca-Cola Life" sweetened with sugar and stevia in Argentina last year. In the latest quarter, Kent said soda volumes in the country rose by a high-single-digit percentage.

Earlier this month, the company also said it was buying a stake in Green Mountain Coffee Roasters (GMCR) and teaming up with the company on a machine that would let people make Coke drinks and other cold beverages at home.

For the three months ended Dec. 31, Coca-Cola earned $1.71 billion, or 38 cents a share. Not including one-time items such as the restructuring of its bottling operations overseas, it earned 46 cents a share, in line with Wall Street expectations.

A year ago, the company earned $1.87 billion, or 41 cents a share.

Revenue fell to $11.04 billion, short of the $11.31 billion Wall Street expected.

Its stock was down more than 4 percent to $37.31.


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52 Comments

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rbrtkyte

I guess the smart money has ALWAYS been on Pepsi ...PEpsi freeking rules baby !!! hahahahaha !

February 19 2014 at 2:13 AM Report abuse rate up rate down Reply
StopUrWhining

try lowering your ridiculous price

February 18 2014 at 8:17 PM Report abuse rate up rate down Reply
rgkarasiewicz

Try using cane sugar instead of the fructose.

February 18 2014 at 6:11 PM Report abuse rate up rate down Reply
1 reply to rgkarasiewicz's comment
rbrtkyte

Pepsi Throwback DOES !

February 19 2014 at 2:13 AM Report abuse rate up rate down Reply
crrunch

Haven't had a Coke in years and years. It tasted better with sugar than with corn syrup. EVERYTHING over time costs more - but they messed with the recipe. That was the deal breaker. Bad move - real bad move. So, I suppose I should say thanks for that cuz I don't miss you any more.

February 18 2014 at 4:41 PM Report abuse +1 rate up rate down Reply
John

I'm a retired middle class person. I don't buy coke because it is way over priced. If Coke wants to stay competitive with corrupt corporate America they need to go where the neccessity foods are, i.e., milk, bread, dairy products...chicken is up 18%, there's a place you can rip the public off. People need those foods to live so they are forced to pay them. I'm not forced to buy Coke to survive.

February 18 2014 at 3:40 PM Report abuse rate up rate down Reply
1 reply to John's comment
rbrtkyte

So basically you buy **** soda ?? Buy a Pepsi man !!

February 19 2014 at 2:14 AM Report abuse rate up rate down Reply
israelkickbum

Yes Demcocrats it has to coke, pepsi and DP making everyone fat. Can't be they drink too many of them and never excersise. Has to be fast food and soft drinks never responsibility of kids and parents when its child issue or the adults themselve. As for Coke losing sell volumn of Diet Coke. They probably did change recipe they tried to make new Coke to taste like Pepsi and that really worked. I have drinking diet drinks for almost 50 years just cause don't need sugar but not Diet Coke. I drink their original diet drink TAB and if in restaurant Diet Coke of Tea. I have drank can of caffeine free TAB that I found in Clinton SC mom and pop shop in mid 1980s which I think was over 10 years after they stopped making it. Still tasted better than Diet Pepsi, Diet DP or Diet Rite.

February 18 2014 at 3:14 PM Report abuse rate up rate down Reply
1 reply to israelkickbum's comment
rbrtkyte

you like to ramble and not make any sense don't you ? jeesus !
PEPSI ALL THE WAY TO THE BANK

February 19 2014 at 2:15 AM Report abuse rate up rate down Reply
Willow Moon

I have been a Diet Coke drinker for a very long time. When I had my first go round with cancer, it was the only thing that would settle my tummy since 1971. Coke changed their recipe. Coke raised their prices. Coke no longer settles my tummy. We, the consumers, have not let Coke down, Coke has let us down. For the first time in over 40 years I purposely ordered a Diet Pepsi and enjoyed it. I was astounded. I purchased 2 liter Diet Pepsi at the store. I did a side by side taste taste test between Diet Coke and Diet Pepsi. Sorry Coke, you are going to lose a few bucks, because Diet Pepsi won. Who woulda thunk it. Not me. So bye-bye Diet Coke and hello Diet Pepsi.

February 18 2014 at 2:57 PM Report abuse +2 rate up rate down Reply
2 replies to Willow Moon's comment
charlstern

Willow Moon - Pepsi contains sodium benzoate, which is a carcinogen (cancer causing agent). If you have a compromised immune system, which places you at risk for cancer, I would strongly urge you to try the all-natural and organic sodas like Virgil's (which tastes like the all-natural sodas at the corner fountain candy store of your youth). Check at Whole Foods grocery store or Wegman's for these old-fashioned sodas.

February 18 2014 at 3:46 PM Report abuse +2 rate up rate down Reply
rbrtkyte

Yer gonna die from those damn chemicals lol ! I HATE DIET SODA !! worst damn thing you could ever put in yer body aside from meth

February 19 2014 at 2:17 AM Report abuse rate up rate down Reply
mamoseley3

Coke was my favorite drink for most of my life, but not any more. It tastes like flat syrupy water. No fizz. Doesn't settle a "sick" stomach any more and just doesn't taste good. Guess Obama "changed" it, too. My favorite now is Pepsi.

February 18 2014 at 2:47 PM Report abuse +1 rate up rate down Reply
johnpegwharton

Don't know what is happening elsewhere, but where I am in Michigan Coke has doubled their pricing over the last -2- years.
Finding the pre-mixed powdered Ice Tea and Lemonades take care of my thirst.

February 18 2014 at 2:43 PM Report abuse rate up rate down Reply
1 reply to johnpegwharton's comment
rbrtkyte

ewwwwwwwwwwwwwwww !!1 yukky to yukkier !
Buy yourself a Throwback Pepsi and get happy again lol

February 19 2014 at 2:18 AM Report abuse rate up rate down Reply
SHARON

I love coke but they keep raising the prices. people can't afford it any more.

February 18 2014 at 2:40 PM Report abuse rate up rate down Reply
1 reply to SHARON's comment
rbrtkyte

Coke has ALWAYS SUCKED sorry ! Pepsi all da way baby !

February 19 2014 at 2:19 AM Report abuse rate up rate down Reply