Almost half of its current portfolio of brand is to be cancelled by Coca Cola.
Some beloved but out dated drinks such as Tab, Zico and Odwalla would be discontinued by it, the beverage giant had already announced. But earlier this week the company for the first time announced that it would be doing away with 200 of its brands.
The company explained that it would be able to focus on its most profitable offerings by reducing the portfolio. The focused brands that the company plans to focus on include those in its core products such as Coca-Cola Zero Sugar as well as those brands that are a fit for its trendy new categories, such as Topo Chico hard seltzer and AHA, a caffeinated seltzer the company launched last year.
Which brands will remain in the portfolio has been finalised by the company, said CEO James Quincey during an analyst call.
While not disclosing any specific names that are to be discontinued, he however said that the “hydration” category, with Dasani, Powerade, Vitamin Water and Zico, and other brands, will potentially be affected most.
He said that many of the brand that Coke will be shutting down are manufactured and sold by the company only in certain parts of the world and not globally.
Quincey said over the summer that between Coca-Cola’s successful brands and its struggling ones, there is a stark difference. “Little to no scale” is available for the underperforming beverages and only about 2 per cent of the total revenues of the company is represented by the sale of such products, he explained.
This summer, the company had developed and made public a number of strategies to help its further growth and discontinuing some of its brands was a part of those strategies. This culling of some of the brands will free up resources of the company which it will be able to instead invest in drinks that have higher growth, said the company.
With the closure of restaurants, bras and sporting event during the novel coronavirus pandemic induced restrictions, the business of the company had been hit hard. The net revenue of the company as a group, declined by 9 per cent to $8.7 billion, during the latest completed third quarter. However the results still beat estimates of analysts at the Wall Street with the company share prices pushing up by 2 per cent.
(Adapted from CNN.com)