Coca-Cola Sees Surges in Out-of-Home Demand Post-Lockdown
Coca-Cola, the American multinational beverage corporation, has emerged from the lockdown period due to an increase in its beverage demand across the global market. The rising demand is a result of entertainment units, such as gaming parlours, cinema halls, restaurants, and more, reopening across the world. This demand was required after the shattering second quarter and has helped the world’s largest soda maker bounce back in the market. The increased demand is expected to return Coca-Cola to its pre-COVID revenue generation in the span of a year.
The American beverage producing giant generates half of its revenue by selling its soft drinks to public venues such as restaurants, cinema theatres, and more, and due to their closure caused by the COVID-19 pandemic, Coca-Cola’s revenue took a massive hit. The company also laid off about 4,000 workers in the United States.
At the height of lockdown, in the month of April, the beverage company faced a 50% decline in away-from-home sales. However, the international sales eased up in the third quarter of the year, with the slump getting over due to sales of its trademark Coca-Cola and Coca-Cola zero sugar beverages.
The company currently fears the rising numbers of COVID-19 cases in the winter season, which might lead to regional lockdowns across the world, leading to a disturbance in the recovery of away-from-home sales. Even though the company is not expecting the peak levels of global lockdowns to return due to the rise in COVID-19 cases domestically, it is prepared for future setbacks caused by the local spike in cases and domestic restrictions and closures.
The company’s research during the lockdown periods showed the consumers buying more sparkling soft drinks and juices from the grocery stores and online. This has helped create a demand for Coca-Cola’s product despite the lockdowns across the world. Thus, the company believes that the sales will be steadily increasing, even if coronavirus’ effects linger for another quarter.
Due to the increasing disturbances caused by the pandemic, Coca-Cola has decided to discontinue numerous of its beverages such as ZICO coconut water and TaB sodas in order to implement on its strategy to streamline its beverage portfolio and focus more on its products that are generating more sales in the international market.
In stocks, on per share basis, the Atlanta-based company generated 9 cents above the estimated amount and further generated a net revenue of USD 8.7 billion globally, which was also higher than the estimates.
Meanwhile, the rival beverage company PepsiCo Inc. too survived the slump caused by the lockdowns with more sales generating from convenience stores and gas stations as well as a good demand for snacks.
The Coca-Cola company, with lesser restrictions in the post-lockdown period, is expected to flourish and is projected to generate pre-COVID level revenue with its strategical focus on its best-selling products. The American beverage giant is expected to boost its international sales by selling its best-product on an area-specific basis. The company’s sales through its other beverages than the Coca-Cola trademark, such as Coke-Zero and Diet-Coke, are also estimated to further boost the away-from-home sales and generate more revenue. Also, as the lockdown scenarios ease-up across the world, more and more public venues are expected to reopen, which is forecast to increase the global demand even further.