Coca Cola Amatil (CCA) announced their interim results for the half-year ending 3 July 2015 at a presentation on 21 August 2015. Euromonitor International Research Analyst Lily Lam provided the following analysis of CCA’s results and their relationship to the changing scape of the carbonated soft drinks market.

“CCA’s results are a reflection of the challenging soft drinks market in Australia. Coca-Cola is currently facing pressure from all angles, including competitive pressure from its main competitor, PepsiCo Inc, pricing pressure from Australia’s powerful supermarket duopoly, and demand pressure due to changing consumer preferences away from sugary drinks to better-for-you products. Carbonates hold 69% of the soft drinks market in Australia in 2014, however their rate of consumption has been slowing, with total volumes falling 1% in 2013-2014. The launch of Coke Life in April 2015 invigorated the category with mid-calorie cola options, but its reception fell short of expectations, as it is essentially a sugary drink. Also contributing to declining volumes in carbonates is the trend toward smaller pack sizes such as ‘mini cans’, as health-conscious consumers scale back on their intake of carbonated soft drinks.

With carbonates declining, CCA is increasing its presence in high potential non-carbonated categories, with new product launches in RTD coffee and coconut water in 2014 through brands Barista Bros and Zico. Both categories are experiencing very strong growth, with RTD Coffee forecast 7% annual average growth during 2014-19 and coconut water driving much of the 14% annual average growth forecast within the Naturally Healthy Superfruit 100% Juice category. Moreover, CCA has shown that it is very much focused on the key growth opportunity categories in beverages, such as Sports & Energy Drinks and Bottled Water, which are forecast to grow 43.1 and 172.5 million litres, respectively, from 2014 to 2019.”

 

Leave a comment

Your email address will not be published. Required fields are marked *