The performance of the Chinese market, driven mostly by category breakthroughs and capacity development, has fueled the growth of global beverage giant Coca-Cola according to its third quarter fiscal report.
On Oct 27, the Coca-Cola Company said it has recorded third-quarter net revenues of $10.04 billion, up 16 percent year-on-year and exceeding market expectations of $9.75 billion. Its net income reached 2.47 billion, up 42 percent year-on-year.
In terms of sales, global unit case volume grew 6 percent. Asia-Pacific unit case volume grew 3 percent year-on-year driven by India and China, resulting in even performance on a two-year basis.
Its trademark beverage Coca-Cola and sparkling water brands have continued to lead the charge. James Quincey, Coca-Cola chairman and CEO, said: “While the recovery continues to be asynchronous around the world, we are investing for growth to drive long-term value for the system. Our strong system alignment and networked organization are helping us unlock enormous potential in our brands and across our markets.”
On the earnings call, James Quincey further added,this improvement has been supported by the company’s transformation agenda, which has set it on the path to more efficient and effective marketing as well as more disciplined and intelligent innovation. “We’re investing accordingly behind our portfolio of loved brands and are seeing signs of early traction.”
In the Chinese market, the company has made significant progress during this quarter.
Driven by the company’s “Beverages for Life” strategy, its China unit has accelerated product and category innovation and brought consumers fresh choices in low-alcohol beverages, chilled milk and plant-based beverages in addition to its classic soft drink, juice and drinking water categories, the report said.
In September, Coca-Cola China launched the low-alcohol beverage Lemon-Dou, a lemon alcoholic seltzer, following the launch of Topo Chico Hard Seltzer in June and further increasing its presence in the low-alcohol beverage market in the country.
In September, KeNiuLe Dairy Co Ltd, a joint venture between Coca-Cola Company and Mengniu, launched chilled milk brand Fairlife in the country, a breakthrough in the Chinese chilled milk market for the company. These milk products use ultra-filtration technology which is internationally patented, offering multiple benefits including high protein content, high calcium content, zero lactose and a longer shelf life.
Culiangwang, a wholly owned subsidiary of Coca-Cola China, has also launched Zhibaishuo Oat Milk, a plant-based beverage offering consumers a non-dairy milk alternative.
In bottling, investments have been added to meet growing demand.
COFCO Coca-Cola and Swire Coca-Cola, the two major bottling partners of Coca-Cola China, have announced their investment and expansion plans .
In September, COFCO Coca-Cola Beverages Shanxi signed a contract with the Shanxi Transition and Comprehensive Reform Demonstration Zone on COFCO Coca-Cola’s new plant in Shanxi province. Under the contract, nine beverage production lines will be built in the plant, with annual production capacity of nearly 1.4 million tons.
The new plant is expected to be completed and put into operation by the end of 2023. After completion, it is likely to become the largest plant of beverages in Shanxi province.
In October, the groundbreaking ceremony for the expansion and reconstruction of Swire Coca-Cola Zhengzhou took place in Zhengzhou, Henan province. Total investment for the project is no less than 900 million yuan. It is the largest single investment of Swire Coca-Cola in China so far. After completion, the maximum annual production capacity of the new plant will reach 1 million tons.
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