The Coca‑Cola Company’s results in the first quarter of 2021 show promising signs that a broader recovery is on the horizon, Chairman and CEO James Quincey told analysts and investors April 19.
“As we navigate the dynamic global environment, we continue to evolve and do better,” Quincey said. “We are well positioned for the recovery as it plays out, both as an organization and as a system.”
During the quarter, the company delivered sequential monthly improvement as COVID-19 lockdowns eased, vaccinations accelerated and mobility gradually returned in select markets. While sales volume declined mid-single digits through mid-February, March signaled a return to pre-pandemic levels, fueled by a strong rebound in China and other parts of Asia Pacific.
“In markets at the forefront of the recovery, we’ve seen early signs that our actions from the pandemic are helping us outpace recovery,” Quincey said, noting that the path to a full recovery remains asynchronous around the world. “Many markets haven’t yet turned a corner and are still managing through restriction.”
Strategic actions taken in 2020 – including a streamlined global portfolio and disciplined approaches to marketing and innovation, driven by a newly networked culture and operating structure – are beginning to bear fruit.
During the quarter, operating unit and category leadership teams invested in high-potential brands and opportunities, prioritizing shelf space for product launches and higher-velocity products and making portfolio decisions more quickly and at scale.
“We’re focusing on what we do best: Marketing loved brands in more efficient and effective ways,” Quincey said, citing the recent launch of the first-ever global campaign for Sprite, “Let’s Be Clear.”
Local experiments like Aquarius with functional benefits and Ayataka Caffe Maccha Latte in Japan, Fanta’s mystery flavor innovation in Europe and package innovations like the 13.2-oz. 100% recycled PET Coca‑Cola bottle in North America can be lifted-and-shifted globally, similar to AHA flavored sparkling water.
“Our more disciplined innovation approach is yielding results, as we balance big bets with intelligent experimentation,” Quincey said. “Using a networked approach, we’re scaling our best innovations quickly and effectively, while being disciplined with those that don’t get traction required for further investment.”
Big bets for 2021 include ongoing work to scale the company’s coffee platform under the Costa brand; the launch of an enhanced formula and package design for Coca‑Cola Zero Sugar in Europe and Latin America, which will roll out globally this year; and expanded experimentation in flavored alcoholic beverages with Topo Chico Hard Seltzer in Latin America, Europe and the United States.
Chief Financial Officer John Murphy said the company expects to see signs of a return to normal in more markets in 2021 and, as a result, is readying its supply chain for greater demand.
“There’s no doubt that uncertainty remains,” Murphy said. “But as we begin to lap the most difficult periods from last year, we feel good about our position and ability to navigate the environment as a company and as a system, based on the learnings and the agility provided by our new networked organization. We remain confident that our actions and the progress we’ve made will enable us to deliver 2021 earnings that are at or above 2019 levels.”