According to ET, Strict lockdowns led by India brought down beverage maker Coca-Cola’s consolidated volumes for sparkling drinks by 12% in the June quarter, the Atlanta-based beverage maker said in an earnings release on Tuesday.
The maker of Coke and Sprite sparkling drinks said its consolidated second quarter volumes for sparkling soft drinks fell 12% led by India, Western Europe and the fountain business in North America due to pressure in away-from-home channels.
Within the Asia Pacific region, unit case volumes declined 18%, primarily due to strict lockdowns in India, the company said. The unit case volume decline was partially offset by positive performance in China, it said.
“We believe the second quarter will prove to be the most challenging of the year. However, we still have work to do,” Coca-Cola chairman James Quincey said in the earnings statement.
The Indian government announced a nationwide lockdown starting March 25, which resulted in complete shutdowns of markets, malls, restaurants and cinema theatres. The lockdown coincided with the peak season for soda makers, with the April-June quarter contributing more than half of the soft-drink industry’s annual sales of over Rs 20,000 crore, three-fourths of which are contributed by out-of-home consumption.
The beverage maker further added that juice, dairy and plant-based beverages declined 20%, driven by pressure in the Asia Pacific and Europe, while the packaged water and sports drinks businesses declined 24% led by Asia Pacific.
While its overall global unit case volumes declined 16%, net revenues fell 28%. In terms of overall sales, the quarter saw its steepest drop in at least a decade.
Coca-Cola said as the coronavirus pandemic continues to evolve, there is uncertainty around its ultimate impact, adding that full year financial and operating results cannot be reasonably estimated at this time.
The company said it lost value share in total nonalcoholic ready-to-drink beverages as underlying share gain was more than offset by negative channel mix due to pressure in away-from-home channels. It said it saw improvement in away-from-home trends as the quarter progressed with global lockdowns easing.