Coca-Cola has decided to discontinue about half of its portfolio, which is about 200 brands all in all. The beverage company had already announced that it would say goodbye to some beloved drinks like Zico, Tab, and Odwalla, stating on October 22 that the beverages are already outdated.
Coca-Cola says goodbye to 200 drinks
According to the company, reducing the company portfolio will allow Coca-Cola to focus on its most profitable products. Those include its main products like Coca-Cola Zero Sugar and brands that fit into new categories like AHA, a caffeinated drink the company launched in 2019, and Topo Chico.
James Quincey, the company CEO, said during an analyst call that the company has finalized which brands will remain in the portfolio, according to The New York Times.
Quincey did not give any specific names of the brands that will be discontinued. Still, he stated that the hydration category, with Powerade, Vitamin Water, Dasani and Zico, and other brands, will be cut.
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Water and sports drink volumes had fallen 11% in the third quarter of 2020. Many of the brands that Coca-Cola will discontinue are only sold in certain markets instead of nationwide.
According to Quincey, there is a massive difference between Coca-Cola's successful brands, and its not so popular ones. He explained that the underperforming beverages have "little to no scale" and that the underperforming beverages' sales represent 2% of the company's total revenue.
Discontinuing brands that no longer reap revenue is one of the strategies that the beverage giant had laid out this summer to help the company grow. Coca-Cola says the move will help free up the resources so it can invest more in higher-growth drinks.
The pandemic has hit Coca-Cola hard because thousands of restaurants all over the world had closed down. In the third quarter of the year, the net revenues declined 9% to $8.7 billion, according to Business Insider.
Coca-Cola's slow recovery
As the world is slowly going back to normal, restaurants are now opening up, and movie theaters are also scheduled to start accepting audiences but to some restrictions, according to Today.com.
The company has been making up for the damage done in the past few months, and they see a rise in their other beverages, like orange juice, which the consumers take home.
As of October 2020, the sales based on unit cases recorded a single-digit decline compared to October 2019. In April 2020, the sales were down 25%.
Coca-Cola also noted that some markets are doing better than the rest. There is sales improvement in Brazil, India, and Japan in the third quarter of the year, but the recovery in other places such as Mexico has been below expectations. In the United States, the sales of beverages at convenience stores increased slightly after a slight slump.
Other beverages that will be discontinued are North Neck Ginger Ale, Delaware Punch, Tab, Zico coconut water, Odwalla, Coca-Cola Life, and Diet Coke Feisty Cherry.
The full list of beverages that the company will discontinue has not been released yet, but all 200 brands are expected to leave the shelves before the year ends.
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